Energy dominates DBN loan book
The energy and gas sector controlled the bulk of approvals in the Development Bank of Namibia’s loan book for the second quarter 2014 as revealed by the bank’s Head of Lending, John Mbango earlier this week in Windhoek.
Loans to a total N$471,2 million were approved for the quarter with the energy and gas sector receiving 80.3% of the total approvals, pegging it at a colossal N$378,2 million to date as compared to the ailing retail and trade sector that recorded the lowest allocation of onlyN$100,000. Mbango said the sector that received the second highest injection is business services (N$32.5 million), followed by construction (N$31 million). Of the approved energy sector loans, Mbango highlighted the approval of N$84 million for construction of a 4,5 mW solar photovoltaic park near Omaruru. The park, he said, will provide electricity to NamPower for onward distribution to local users. He said the project not only illustrated the bank’s commitment to stabilising Namibia’s power supply, but also the bank’s value of innovation and its commitment to environmentally sound and sustainable use of resources. The distribution of loans according to region is dominated by the Erongo Region which received the largest amount of approvals, totalling N$373.7 million, which signals that the bulk of electrical and gas projects are located in this region.
The Khomas Region is second with N$30.8 million and the Otjozondjupa Region third with N$19.4 million. Asked about the balance of the approvals in the energy and gas sector, Mbango said an announcement will be made at a later date. He said that the new loans will have a significant impact on the long-term sustainability of the energy and gas sector. In terms of employment creation, the second quarter approvals are projected to affect 2,180 jobs. Of these, 274 are expected to be new jobs, 639 temporary jobs and 1,267 retained jobs. Mbango said that approvals in the energy and gas sector are expected to secure countless existing jobs as well as add to capacity for new and temporary jobs. Of the approvals, 90% is allocated to previously disadvantaged Namibians. Allocations to enterprises owned by women amounted to 23% and allocations to youth enterprise made up 25% of the approvals.
Mbango said the Development Bank has a target of approving at least N$100 million for the 2014 financial year to women and that, at the end of the second quarter, the Bank’s level of approvals to this client demographic, was N$55,3 million. Approvals for young entrepreneurs, he said, amounted to N$47,4 million, more than double the minimum target of N$20 million for 2014.