Nam secures green loan from Germany

Water, energy and agri

14 May 2021 | Economics

Staff Reporter – The 100-million-euro loan agreement signed by finance minister Iipumbu Shiimi and German ambassador Herbert Beck this week will fund crucial water and climate-related infrastructure projects in Namibia.

KfW Development Bank will provide the loan, worth some N$1.8 billion, at reduced interest to secure favourable credit conditions for Namibia. The agreement follows the 2019 government negotiations on development cooperation between the two countries.

About N$900 million of the loan is to upgrade the water infrastructure in Windhoek by modernising and extending the Gammans waste water treatment plant. The investment will increase the capacity of the plant from 25 000 m3 to 55 000m3 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,” the parties said in a joint statement.

The project will complement the ongoing support provided by the German development cooperation to the City of Windhoek. This includes a 40-million-euro interest-reduced local currency loan (about N$720 million) previously for the construction of an additional direct portable reclamation plant in the city, as well as a grant to identify measures to reduce water losses in Windhoek’s water supply and sewerage system.

DBN CREDIT LINE

About N$540 million or 30 million euro of the new loan will allow the Development Bank of Namibia (DBN) to extend its existing credit line for climate-related infrastructure projects in the country.

This facility provides long-term finance to both private and public investors for projects like solar photovoltaic and wind energy generation, as well as rural and urban water infrastructure and public transport projects.

This second credit-line provided via KfW will support the further expansion of the DBN’s business activities and will be accompanied by capacity building measures for the bank to ensure compliance to international environmental and social standards.

FOOD SECURITY

Around N$360 million or 20 million euro will go towards Agribank to sustainably and efficiently expand the range of financial services to agricultural households, as well as micro, small and medium-sized enterprises.

It will support the development of new and innovative financial products to unlock access to affordable finance, especially for small-scale farmers. This credit-line will be accompanied by a grant for capacity buildings to secure the successful implementation of the programme.