The Namibian Defense Ministry handed Enercon N$60 million in 2023, just a few months after they cut ties with the company. The fuel supplier had failed to deliver fuel to military bases for six straight months. The defense ministry partly owns Enercon through a state-run military company called August 26 Holdings. Brothers Peter and Malakia Elindi hold stakes in the company as well.
Former Enercon chief Victor Malima and businessman Austin Elindi also partner in the venture. Defense ministry executive director Wilhelmine Shivute recently admitted they made the payment. She told The Namibian they checked everything properly and asked for legal advice before paying the money. The attorney general's office pushed for the payment because of a strange clause in the contract.
This clause forces the government to pay leftover bills even after they end the agreement. Many critics call it the devil's clause because it traps the state into paying despite Enercon repeatedly failing to deliver fuel. The government ended the contract around October last year. Enercon has tangled with state agencies before in big-money deals.
The company became involved in an N$58-million scandal at the National Petroleum Corporation of Namibia. Enercon also faces a N$114-million debt fight with Namcor. The state oil company wants courts to shut down Enercon completely. Since 2012, Enercon has grabbed over N$1 billion in defense ministry contracts.
These deals included supplying petroleum products and building fuel stations at Namibian Defense Force bases. Their long partnership fell apart in 2023 when Enercon allegedly stopped delivering fuel for six months. Yet they still received millions through that tricky contract clause. The joint venture lets Enercon bill the defense ministry regardless of whether they finish the work.
Three government entities play roles in this arrangement: August 26, the defense ministry, and Namcor. Namcor lost the most money. Under this setup, Enercon took fuel from Namcor but allegedly never paid, building up over N$114 million in debt. They then supplied this fuel to the military and made profits at Namcor's expense.
From 2019 through 2024, Enercon charged service bureau fees to maintain fuel station assets at NDF bases. These stations sit at places like Suiderhof, Osona, and Grootfontein. As long as Enercon controls these assets, the military must pay monthly fees. Some payments remain unpaid. The agreement sets monthly charges at N$33,000 for each completed fuel station.
The rate jumps up to 10% every year after completion. Similarly, they charge N$42,000 monthly for each strategic petroleum reserve facility, with the same 10% yearly increase. Several defense officials, including director Shivute, fought against paying the recent N$60 million. Shivute wanted Enercon to sign away any future payment claims.
She explained her position by saying she needed all the necessary information as part of her duty as an accounting officer. The N$60 million payment happened after Attorney General Festus Mbandeka forced the issue. On December 19, 2024, he sent his legal opinion to Defense Minister Frans Kapofi. Mbandeka claimed the defense ministry broke its promise by not paying the service charges outlined in the main contract.
The ministry argued Enercon hadn't sent bills since 2016 when invoicing should have started. They also claimed any bills older than three years had expired legally. Enercon disagreed completely. Mbandeka explained these charges automatically become due at the end of each period. He stated the amount must be paid each month as written in the contract.
The attorney general insisted payment was required by contract, whether services happened or not. He said no expiration applied because the contract remained active. Even if terminated, arbitration would pause any expiration under Section 15 of the law. Mbandeka noted the eight-year period exceeds the three-year limit in the Prescription Act.
However, no contract provision extends the claim period. He concluded that the defense ministry legally must pay these monthly service charges. He suggested the ministry renegotiate charges based on actual services if it wanted to keep the agreement. Mbandeka advised settling quickly since the amount grows each month. He recommended working out a payment plan with Enercon if needed.
The Namcor-Enercon deal also played a key role in firing former Namcor boss Immanuel Mulunga last year. A N$53-million payment from Namcor to Enercon sparked the controversy. This money would have let Namcor take control of fuel stations at various military bases. The arrangement also included Namcor buying oil storage facilities from Enercon.
Military objections forced Enercon to cancel the agreement. However, they failed to return the N$53 million immediately, causing more financial damage to Namcor. Finance Minister Iipumbu Shiimi previously raised alarms about how Enercon deals with Namcor. The state company has asked the High Court to shut down Enercon to recover the N$114 million debt.
Namcor spokesperson Utaara Hoveka said yesterday they knew nothing about the payment and received no money from Enercon. We wait for the judicial process to run its course, he added. Enercon chief Connie van Wyk claimed all payments to Enercon covered bills the ministry already owed them. Payment delays from the defense ministry prevented Enercon from paying most of its creditors.
Van Wyk said this caused them to fall behind with many companies they owe money to. Enercon has since received payment of outstanding invoices and made payment to its creditors. He said Enercon and Namcor have an ongoing legal matter, and we cannot comment until this has been resolved.
Former Enercon chief Victor Malima and businessman Austin Elindi also partner in the venture. Defense ministry executive director Wilhelmine Shivute recently admitted they made the payment. She told The Namibian they checked everything properly and asked for legal advice before paying the money. The attorney general's office pushed for the payment because of a strange clause in the contract.
This clause forces the government to pay leftover bills even after they end the agreement. Many critics call it the devil's clause because it traps the state into paying despite Enercon repeatedly failing to deliver fuel. The government ended the contract around October last year. Enercon has tangled with state agencies before in big-money deals.
The company became involved in an N$58-million scandal at the National Petroleum Corporation of Namibia. Enercon also faces a N$114-million debt fight with Namcor. The state oil company wants courts to shut down Enercon completely. Since 2012, Enercon has grabbed over N$1 billion in defense ministry contracts.
These deals included supplying petroleum products and building fuel stations at Namibian Defense Force bases. Their long partnership fell apart in 2023 when Enercon allegedly stopped delivering fuel for six months. Yet they still received millions through that tricky contract clause. The joint venture lets Enercon bill the defense ministry regardless of whether they finish the work.
Three government entities play roles in this arrangement: August 26, the defense ministry, and Namcor. Namcor lost the most money. Under this setup, Enercon took fuel from Namcor but allegedly never paid, building up over N$114 million in debt. They then supplied this fuel to the military and made profits at Namcor's expense.
From 2019 through 2024, Enercon charged service bureau fees to maintain fuel station assets at NDF bases. These stations sit at places like Suiderhof, Osona, and Grootfontein. As long as Enercon controls these assets, the military must pay monthly fees. Some payments remain unpaid. The agreement sets monthly charges at N$33,000 for each completed fuel station.
The rate jumps up to 10% every year after completion. Similarly, they charge N$42,000 monthly for each strategic petroleum reserve facility, with the same 10% yearly increase. Several defense officials, including director Shivute, fought against paying the recent N$60 million. Shivute wanted Enercon to sign away any future payment claims.
She explained her position by saying she needed all the necessary information as part of her duty as an accounting officer. The N$60 million payment happened after Attorney General Festus Mbandeka forced the issue. On December 19, 2024, he sent his legal opinion to Defense Minister Frans Kapofi. Mbandeka claimed the defense ministry broke its promise by not paying the service charges outlined in the main contract.
The ministry argued Enercon hadn't sent bills since 2016 when invoicing should have started. They also claimed any bills older than three years had expired legally. Enercon disagreed completely. Mbandeka explained these charges automatically become due at the end of each period. He stated the amount must be paid each month as written in the contract.
The attorney general insisted payment was required by contract, whether services happened or not. He said no expiration applied because the contract remained active. Even if terminated, arbitration would pause any expiration under Section 15 of the law. Mbandeka noted the eight-year period exceeds the three-year limit in the Prescription Act.
However, no contract provision extends the claim period. He concluded that the defense ministry legally must pay these monthly service charges. He suggested the ministry renegotiate charges based on actual services if it wanted to keep the agreement. Mbandeka advised settling quickly since the amount grows each month. He recommended working out a payment plan with Enercon if needed.
The Namcor-Enercon deal also played a key role in firing former Namcor boss Immanuel Mulunga last year. A N$53-million payment from Namcor to Enercon sparked the controversy. This money would have let Namcor take control of fuel stations at various military bases. The arrangement also included Namcor buying oil storage facilities from Enercon.
Military objections forced Enercon to cancel the agreement. However, they failed to return the N$53 million immediately, causing more financial damage to Namcor. Finance Minister Iipumbu Shiimi previously raised alarms about how Enercon deals with Namcor. The state company has asked the High Court to shut down Enercon to recover the N$114 million debt.
Namcor spokesperson Utaara Hoveka said yesterday they knew nothing about the payment and received no money from Enercon. We wait for the judicial process to run its course, he added. Enercon chief Connie van Wyk claimed all payments to Enercon covered bills the ministry already owed them. Payment delays from the defense ministry prevented Enercon from paying most of its creditors.
Van Wyk said this caused them to fall behind with many companies they owe money to. Enercon has since received payment of outstanding invoices and made payment to its creditors. He said Enercon and Namcor have an ongoing legal matter, and we cannot comment until this has been resolved.
