China offers 90% of airport funding
The Asian giant is dangling about N$6.3 billion in Namibia’s face, a tempting offer that is now receiving high-level attention.
20 May 2020 | Transport
The Chinese government has offered to finance up to 90% of the construction and expansion of the Hosea Kutako International Airport, whose cost last stood at N$7 billion.
This means China has put on the table about N$6.3 billion.
Namibia is, however, yet to take up the loan facility extended by the Chinese government, government said yesterday.
If Namibia accepts the Asian giant’s offer, it is still not clear whether government would cover the remaining 10% of the project from its own reserves or borrow elsewhere to make up for the shortfall.
China has been courting Namibia since 2017 with the conclusion of the Forum for China Africa Cooperation (FOCAC), where it availed US$60 billion (N$1.1 trillion) in infrastructure funding to African governments.
The funding is being rolled out under that government’s Belt and Road Initiative.
Not signed yet
Finance ministry spokesperson Tonateni Shidhudhu confirmed that Namibia has not signed on the dotted line, despite media reports to the contrary.
“The ministry is still working on the modalities for the financing deal. It is still not finalised. Hopefully the minister will pronounce himself after the delivery of the budget,” he said.
He would not provide any specifics related to the amount of funding earmarked for the development of the airport, but said up to 90% in project financing was being availed by the Chinese government.
No information was divulged on the potential interest government would pay, whether there would be a grace period before Namibia would restart loan repayments and whether any part of the loan was concessionary.
Newly appointed finance minister Iipumbu Shiimi is expected to table his maiden budget before the end of this month.
President Hage Geingob had previously welcomed the loan offer made by the Chinese government.
“We would like to express our appreciation for the special financial package for our main airport. We are very happy to know about the package to help us build our new airport,” the president said.
He indicated the project would put China's assistance to Namibia in the public view.
“We must still come back because of this crisis to ask for more benefits in that relationship regarding the airport,” Geingob said.
The president was reported to have been on a phone call with his Chinese counterpart, Xi Jinping.
“China’s loans to Namibia, as at July 2019, amounted to 2,6% of total government debt, and 7,9% of total external debt of Namibia,” Chinese embassy spokesperson Lu Hairong has previously indicated.