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Development Bank celebrates 15th anniversary – from a one-man show to a development finance anchor

Development Bank celebrates 15th anniversary – from a one-man show to a development finance anchor

Marking the fifteenth anniversary of the Development Bank of Namibia, its Chief Executive, Martin Inkumbi, said the bank was capitalised by its shareholder the Ministry of Finance, but that its primary source of growth has been its ability to attract further capital on the back of government’s equity capital contribution.

Prior to its founding, the Bank adopted a commercial model in which repayment of loans and interest, is primarily reallocated to additional lending, with a portion set aside for prudent reserves. In addition to subsequent tranches from its shareholder, the commercial approach to lending has had a significant multiplier effect on the bank’s ability to finance additional projects.

To date, the bank’s loan book, its major asset, stands at N$8.8 billion.

Explaining the institution’s role in development financing, Inkumbi said it extends beyond lending and it has had a catalytic effect on forms of finance, for instance contract financing which enables the bank to support contractors who are successful in bidding for large tender but do not have sufficient funds to bankroll such projects.

Renewable energy is another industry where the Development Bank has made great strides. In order to enable privately owned utilities to participate in electricity generation, regulatory change had to be paired with a suitable financing model. In addition to photovoltaic plants, the bank has also financed the Ombepo wind farm, another first in Namibia.

Finally, he highlights the bank’s apex finance which provides capital to on-lenders. Although the bank is noted for providing capital to two local commercial banks and the Namibia Procurement Fund in the past for SME finance, what is not well known is that it provides apex microfinance for entities which on-lend small amounts for business activities with beneficial development impacts. An example is the bank support to Postfin, the lending arm of Nampost Savings Bank.

The Development Bank was also the first financial institution to implement an environmental and social management (ESM) system. The ESM unit monitors all projects financed by the bank for compliance with local environmental, labour and social legislation and regulations. The ESM unit also vets applications to ensure that potential lending will not have negative environmental and / or social impacts.

Furthermore, based on its advanced risk management model, the bank is able to assess risk ahead of investment, making it possible to finance projects of which the risk profile is unacceptable to commercial lenders. This underscores the vital point that the Development Bank is not in competition with commercial banks, instead serving as a complementary financier, and in some cases, as a proxy for direct finance, creating a channel that opens up financing opportunities for commercial lenders

He also said that the bank is developing a credit guarantee scheme which will be made available to commercial sources of finance, such as banks, to reduce the risk of financing SMEs with sound business plans and cash flow projections, but with lower levels of collateral. The assurance scheme will enable banks to finance a greater number of SMEs.


 

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Following reverse listing, public can now acquire shareholding in Paratus Namibia

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20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.