Govt seeks more loans

The Namibian government has prepared a presentation for loans from the New Development Bank, locally known as the Brics Bank.

15 October 2018 | Infrastructure

It appears that the Namibian government is preparing an official pitch to obtain funding from the New Development Bank, more commonly known as the Brics Bank, for the construction of the Baynes hydropower project as well as the Trans-Kalahari Rail link (TKR), the Grootfontein – Rundu – Katima Mulilo rail link and the deepening of the Port of Lüderitz.

The bank, founded and funded by Brazil, Russia, India, China and South Africa, is headquartered in Shanghai, China, with its first regional office in Johannesburg.

The government's debt at the end of March 2018 stood at just over N$78 billion, slightly more than a third of the country's gross domestic product, which is at N$191


In a brief presentation seen by Namibian Sun, the projects are listed as priority projects. Communications minister Stanley Simataa said in September that the government was eyeing the development of the projects in its quest to make Namibia a logistics hub for southern Africa.

In the document, the government says the purpose of the project is to open a rail trade route from Walvis Bay to countries such as Zambia, Zimbabwe, Malawi, the Democratic Republic of Congo and Botswana.

“Currently, all cargo from Walvis Bay destined to and from land-locked countries is transported by road, and this is causing damage to the infrastructure, high maintenance costs and accidents,” the document says.

A feasibility study of the Grootfontein-Rundu portion was carried out in 2010, and the government is currently engaged with route alignment and design, including the rail traffic and cargo interchange at Grootfontein.

Ironically, the TKR project features despite the fact that no significant headway has been made to bring that project to fruition.

“The TKR is a bilateral project between the governments of Namibia and Botswana to construct a railway line of about 1 500km linking Botswana and Namibia to transport coal to the overseas market,” the document says.

Despite the inclusion of the project, Namibian high commissioner to Botswana Mbapeua Muvangua told Southern Times last year that an office had been set up in Namibia to accommodate three Namibian technicians and three technicians from Botswana, but they were still waiting on the latter to make their technicians available.

“Once the technicians are in the office, they have the mandate to form public-private partnerships with other investors,” he said, adding that the project required billions of dollars in investment, which needed the support of private investors.

The other project, the expansion of the Trans-Orange corridor, ties in with plans to deepen the port of Lüderitz by 18 metres to tap into the export of manganese from South Africa's Northern Cape.

Under this project, the government intends to extend the railway line from line from Keetmanshoop to the Northern Cape. Plans are in place to upgrade the 40km railway line between Sandverhaar and Bucholzbrunn and upgrading it to an 18.5-ton axle load, which would raise the permissible speed to 60km/h.

Another listed project is the planned 600-megawatt Baynes hydropower station to be built by the governments of Namibia and Angola. A social impact study has not yet been completed for the project. The study, which is supposed to be completed before the end of this year, is about where the dam and power station will be located. The dam, once completed, may flood the burial grounds of the Ovahimba, a concern which was picked up by human rights pressure groups in the late 1990s.

“What still needs to be completed is the social impact assessment, which relates mainly to negotiations with the affected communities for their relocation from the site earmarked for the project,” NamPower told Namibian Sun in December 2017.

Enter the chinese

The Chinese government is said to have made a tempting offer to finance the upgrading of Hosea Kutako International Airport, which will cost N$5 billion and upwards. This forms part of its pledged funding to Africa of US$60 billion for the construction of infrastructure projects.

The government had sought N$10 billion from the Chinese during the Forum for China Africa Cooperation (Focac). Finance minister Calle Schlettwein defended the loans, saying that they were competitive.

The Chinese government is believed to have offered a 90% loan, repayable at 2% interest, while the rest of the money would come in the form of a grant to the Namibian government.

Negotiations are said to be ongoing.

Other assistance granted

The German government also came to the party with a N$450 million loan for the construction of the Windhoek-Okahandja dual carriageway, as well as a N$482 million loan for the refurbishment of the Mariental-Keetmanshoop road. The money was provided through its KfW development bank.

The government had in the past sought assistance from the African Development Bank (AfDB) to the tune of N$10 billion.


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