The European Investment Bank (EIB), the European Union's long-term financing institution, is lending EUR 35m (1) from own resources for the construction of high voltage (HV) power transmission lines in the South and the West of Namibia. 

The loan will be used for extending and reinforcing the Namibia's national electricity grid with a 400 kV line to the new Skorpion zinc mine in the southwest of the country, and a 220 kV line to meet growing demand in the Walvis Bay area on the West Coast. 

The loan goes to Namibia Power Corporation Pty Ltd. (Nampower), the national power generating and distribution company. Nampower is a limited liability company, wholly owned by the Government, and operates according to private sector principles with high technical standards. It is one of the most efficient power utilities in the region.

The project, which is the second EIB project with Nampower (2), is foreseen to be co financed with the Development Bank of Southern African (DBSA) and the Agence Française de Développement. It will benefit the Skorpion zinc mine, the single largest ongoing private sector investment in the country (3), improving supply reliability and allowing for future power generation investments once these become economically viable. The Bank's loan will meet the investment's required long term funding, which is not readily available in Namibia.

The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects, which further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with the Union. The Fourth Lomé Convention was concluded in 1989 for a duration of 10 years and is accompanied by two Financial Protocols spanning the periods 1991-1995 and 1996-2000. The total financial package available under the second Protocol amounts to EUR 14.6 billion, consisting of EUR 12 billion in grant aid from EU Member States, EUR 1 billion in risk capital from the European Development Fund (EDF) and managed by the EIB, and up to EUR 1.6 billion in the form of loans from the EIB's own resources.

(1) The EIB manages under mandate part of the European Development Fund (EDF), constituted by contributions from EU Member States, which it uses primarily for risk capital operations. The Bank's own resources are raised on the international capital markets.

(2) The first loan provided 55m EUR finance for the interconector between Namibian and South African grids in 1998. 

(3) For which the EIB funded a feasibility study.