Namibia secures N$1.8 billion German loans

Kandjemuni Kamuiiri

Namibia and Germany on Tuesday signed a N$ 1.8 billion loan agreement, which will fund three programmes in the areas of water, infrastructure and food production.

Minister of Finance, Iipumbu Shiimi, and German Ambassador, Herbert Beck, signed the agreements on behalf of their respective countries. According to Shiimi, financing will be provided by interest-reduced loans in local currency, thereby securing favourable credit conditions for the Government of Namibia. “These projects will support the development of important water and other climate related infrastructure projects in Namibia, and the promotion of agricultural households and micro, small and medium-sized enterprises through Agribank. The funding for the three projects under this agreement is provided by KfW Development Bank,” Shiimi said.

Beck said N$ 900 million from the loan will be provided for the upgrading of the water infrastructure in Windhoek by modernising and extending the Gammans waste water treatment plant.“The investment will allow to more than double the capacity of the plant from 25,000 m³ to 55,000 m³ of water treated per day. This will safeguard the provision of the needed quantity and quality of water as feed stock for water reclamation as one of the backbones of water supply to the city, “he said.

“This project will complement the ongoing support provided by the German development cooperation to the City of Windhoek in implementing its long term strategies to ensure the supply and most efficient use of water for its citizens. This includes already a EUR 40 million (approx. N$ 720 million) interest reduced local currency loan provided for the construction of an additional Direct Potable Reclamation Plant in Windhoek, as well as a grant to identify measures to reduce water losses in the city’s water supply and sewage system.”

Beck said N$ 540 million will be provided to extend an existing credit-line to the Development Bank of Namibia (DBN) for climate related infrastructure projects in Namibia.

“The facility aims to improve access to long-term finance for both private and public investors at incentivised conditions for climate-related infrastructure projects like solar photovoltaic, and wind energy generation as well as rural and urban water infrastructure and public transport projects,” he said.

Beck said for improving food production, income and employment opportunities in rural communities, N$ 360 million will be provided for a credit-line to the Agribank of Namibia to sustainably and efficiently expand the range of financial services available to agricultural households and micro, small and medium-sized enterprises.

“The credit line will support the development of new and innovative financial products to unlock access to affordable finance, especially for small-scale farmers. This credit-line provided via KfW will be accompanied by a grant for capacity development to secure the successful implementation of the program,” he said.

The signing of the Agreement on Financial Cooperation for Loans follows the 2019 Governmental Negotiations on Development Cooperation between Germany and Namibia.

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