Development banks pledge N$8 billion for infrastructure requirements
The Development Bank of Namibia (DBN) and the Development Bank of Southern Africa (DBSA) have jointly pledged N$8 billion in finance for infrastructure requirements in Namibia.
The pledges consist of N$3 billion for Namwater to develop water projects, N$2.5 billion for Nampower, for electricity generation and transmission, and N$2.5 billion pledged to TransNamib for acquisition of rolling stock, railway network upgrades and to operationalize its new business plan which focuses on rail transport.
The announcements and pledges were made by DBN CEO, Martin Inkumbi, and DBSA Head of SADC Client Coverage, Davies Pwele.
Talking about the nature of the pledges, Martin Inkumbi stated that they are commitments to provide finance, but he qualified his statement by saying that provision of finance was subject to suitable projects that satisfied the due diligence of both the Banks.
DBN and DBSA engaged with project promoters prior to the Growth Summit to gauge their medium-term financial capital requirements, Inkumbi went on to explain. He added that the Banks were expecting to provide some finance under the pledges in the third and fourth quarters of 2019, but that final fulfilment of the pledges could materialise over the medium term, depending on ongoing negotiations with promoters and project implementation timelines.
Talking about DBSA’s priority in making the pledges, Davies Pwele said that DBSA supports regional development and integration strategies, aimed at facilitating trade in Africa by investing in infrastructure projects in Africa. In collaboration with national and regional development finance institutions, DBSA identifies and co-finances projects that have synergistic economic development impacts for the SADC region and Africa.
DBN and DBSA have a long-standing relationship that is governed by a Memorandum of Understanding. The Memorandum enables both Banks to jointly participate in the financing of infrastructure projects in Namibia, Pwele explained.
On the topic of collaborative finance with other entities, Inkumbi said a key objective of the DBN, is to mobilise financial capital, locally, regionally and internationally and to channel such capital into infrastructure and industrial projects in Namibia. In line with that objective, DBN collaborates with regional and international development finance institutions in pursuit of mutually beneficial local economic development.
DBSA has long been a highly valued counterpart of DBN, providing technical assistance and augmenting DBN’s financing capacity to bring projects to fruition, he added.
Asked about DBN’s own capacity for finance, Inkumbi said that subject to the quality of its loan book, the Bank projects financing capacity of N$1 billion per year for the coming four years. The cumulative N$4 billion projection includes DBN’s participation in servicing the Growth Summit pledges.
During the same event, the project promoters for the Ongos township development, just north of Windhoek, announced an agreement with DBN in terms of which the Bank will provide N$400 million in finance for the project.
Caption: Joint pledge of N$8 billion at Growth Summit. Pictured above, Davies Pwele of the Development Bank of Southern Africa and Martin Inkumbi of Development Bank of Namibia, announced N$3 billion for Namwater to develop water projects, N$2.5 billion for Nampower, for electricity generation and transmission, and N$2.5 billion for TransNamib to acquire rolling stock, perform railway network upgrades and to operationalize its new business plan which focuses on rail transport.