Chamwe Kaira
Electricity and water supply is expected to grow by 12.3% in 2025, up from 2.3% in 2024, according to the Bank of Namibia’s August economic outlook.
The increase is driven by favourable rainfall, which will boost hydroelectric generation at the Ruacana Power Station and more solar power from projects such as the Otjikoto Biomass Plant and Rosh Pinah’s 70 MW PV facility.
The central bank said, “Rising reservoir levels are also expected to contribute to a stronger performance in the water supply component. Growth in this subsector is expected to remain elevated over the medium term, in line with ongoing investment in renewable energy infrastructure.”
Ruacana accounts for 37% of NamPower’s installed capacity, with its output depending on the flow of the Kunene River.
Lower output increases NamPower’s reliance on imported electricity. Fitch Ratings expects imports to decline sharply from 2027 as new generation capacity comes online. In 2024, imports accounted for 45% of supply, mainly from Zimbabwe Power Company, Zambia Electricity Supply Corporation, and Eskom.
NamPower has extended its contracts with Eskom and ZPC, which were due to expire in 2025, until 2027 and 2030, respectively. No contracts are set for renewal in 2026.
The construction sector is forecast to continue its recovery, growing by 8.5% in 2025 after a 6.4% expansion in 2024. Growth is expected to reach 12.8% in 2026. The central bank said, “This continued recovery is driven by increased activity in mining-related developments and government-funded infrastructure projects.”
The 2025 forecast was revised down by 8.5 percentage points from the April 2025 outlook.
Secondary industries overall are projected to grow by 2.1% in 2025, down from 3% in 2024, as a contraction in manufacturing offsets gains in electricity, water, and construction. Manufacturing is expected to fall due to weaker output in meat processing and basic non-ferrous metals.
The sector is expected to rebound in 2026 with growth of 5.8%, supported by recovery across all subsectors.
