Namibia, Germany enter into interest free loan agreement of over N$2b

Staff Writer

Minister of Finance Ipumbu Shiimi and German Ambassador Herbert Beck signed a Financial Cooperation Agreement between Germany and Namibia on interest-free loans today.

The total amount of the agreement is approximately N$2.7 billion, bringing the total amount of German development cooperation with Namibia to approximately N$26.8 billion.

The agreement covers three major areas of German-Namibia development cooperation: NamPost Funding Facility in Support of Micro and Small Enterprises (MSE) and Low Income Households in Overcoming the COVID-19 Crisis, with an investment of up to N$334 million; Water Sector Support

Program II, with an investment of up to N$1.25 billion and Renewable Energy Program, with an injection of up to N$1.1 billion.

The NamPost Funding Facility in Support of MSE and Low-Income Households aims at providing microcredits to predominantly rural customers, mainly women. The interest-reduced local currency loan to NamPost/PostFin addresses the high demand for credit of vulnerable groups and provides access to loans specifically in order to alleviate the negative consequences of the Covid-19 pandemic.

The Water Sector Support Program II is an additional funding for the ongoing Namibian Water Sector Support Program. The continuation of support intends to make a direct contribution to Namibia’s adaptation to climate change.

The program is aiming at the implementation of new water projects to improve access, quality and sustainability of water supply and sanitation in Namibia. Against the backdrop of more frequent

droughts, the program strives also to reduce water losses thereby contributing to resource conservation and increasing the resilience of the population.

The Renewable Energy Program aims at supporting NamPower to expand its production capacities of renewable energy. The project will establish the first major windfarm in Namibia with a capacity of up to 40 MW and is located 30 km North of Rosh Pinah. This major windfarm provides a valuable learning experience for NamPower. It is supporting the ambitious targets of NamPower to increase the supply of renewable energy and to improve the energy independence of Namibia. In addition, the project contributes to Namibia’s aspirations becoming a hub for the production of green hydrogen.

Shiimi thanked the German government for its continued support during the signing.

“Namibia is very grateful for the continued support from the Federal Republic of Germany. The agreed financial support is for strategic investments in critical areas that will help the economy to recover and it will come in handy to help us build back better,” said Shiimi.

The three projects are intended to directly contribute to the achievement of HPP II and the updated NDC, assisting in the resumption of growth following the severe impact of the COVID-19 Crisis.

Beck expressed confidence that the agreed upon areas of the two countries bilateral financia cooperation will make a significant difference in the lives of Namibians, as they will directly contribute to the implementation of the Harambee Prosperity Plan, the government’s economic recovery and development strategy.

By Observer