Calle Schlettwein, minister of finance of the Republic of Namibia, and Christian Schlaga, ambassador of the Federal Republic of Germany have signed a financial cooperation agreement on interest-subsidised loans between Germany and Namibia
The agreement covers programmes to the value of US$90.87mn, financing three projects to support the development of water and transport infrastructure as well as financial inclusion in particular in rural areas.
The funding for the three projects under this agreement is provided by KfW Development Bank.
NDP5 road rehabilitation and maintenance programme
Around US$22.72mn will be provided for the completion of Phase 2 of MR44 Swakopmund – Walvis Bay. The completion of this road is set to give full functionality to the freeway, especially in view of the realisation of the new port facility in Walvis Bay.
This aims to relieve heavy traffic that is bound to inland destinations as well as to countries toward Namibia’s northern borders. This new project is the continuation of the NDP5 Support Programme on Road Maintenance and Rehabilitation jointly implemented by RAl, RFA and KfW. Under the same programme, co-financing has been provided by German Financial Cooperation for the road construction works at Windhoek – Okahandja and Mariental – Grünau.
Securing Windhoek water supply
Around US$45.44mn will be provided to upgrade the water infrastructure in Windhoek which includes the construction of an additional Direct Portable Reclamation Plant.
To mitigate the challenges of climate change, Germany and Namibia will continue cooperation in the water sector which started more than 20 years ago with the financing and construction of the New Goreangab Reclamation Plant.
Lending to small enterprises and low-income households
Around US$22.72mn will be provided as long-term financing to NamPost in support of lending to small enterprises and low-income households via its subsidiary NamPost Financial Brokers (PostFin). This is set to increase the financial inclusion in particular in rural areas, due to the NamPost’s countrywide presence via its 144 branches and offices.
Calle Schlettwein emphasised, “Germany remained a major bilateral development cooperation partner to Namibia despite our country having graduated to an Upper Middle Income Country and other partners reducing or withdrawing their cooperation with us. The targeted uptake of loans does not constitute additional borrowing, but means of funding for budgeted projects. The disbursements provide for local currency arrangement, which eliminates foreign exchange risks.”
