The Development Bank of Namibia (DBN) has expressed satisfaction with its financial performance in an annual report for the financial year that ended 31 March 2017.
Speaking about the results, DBN CEO Martin Inkumbi says, the Bank’s loans and advances grew to N$6.7 billion, up from 3.8 billion for the 2016 period. The Bank’s profit was N$172 million. The bulk of this will be redirected to lending, with portions set aside to maintain prudential requirement liquidity standards, for the Project Preparation Fund and for corporate social investments (CSI).
The Project Preparation Fund (PPF) is deployed at the Bank’s discretion, to assist projects with exceptional potential development impact to further prepare business plans and improve their sustainability. In 2017 N$2.7 million was disbursed from the PPF to prepare projects in the fields of renewable energy, and affordable land and housing.
In total, the Bank’s assets grew to N$7.8 billion at 31 March 2017, compared to N$4.6 billion at 31 March 2016.
Asked about loan impairments, Inkumbi says that the Bank’s impairment ratio is 2.9%, below the target of 3% that the Bank imposes on itself. He points out that impairments are delayed repayments, and do not constitute bad debts until the Bank is forced to take legal action. He goes on to say that the level is substantially lower than the 7% benchmark of the Association of African Development Finance Institutions (AADFI).
In terms of its impact, Inkumbi says the Bank projects that its approvals in 2017 created 2,197 temporary jobs and 1,607 new, permanent jobs. Of its approvals, N$894 million was allocated to previously disadvantaged Namibians, with N$257 million approved for women entrepreneurs and N$148 million for young entrepreneurs.
The Bank, Inkumbi says, has also made strides towards addressing national issues. N$436 million was allocated to construct 736 housing units, and N$114 million was approved for servicing of 498 erven. Allocations to energy generation amounted to N$462 million.
For the financial period that ended March 2017, the Bank has observed lower credit demand in some key economic sectors such as manufacturing and tourism. Allocations to the manufacturing sector for the period amounted to N$140 million. The tourism and hospitality sector received allocations of N$62 million. The Bank’s cumulative investments in these two sectors however remains satisfactory at N$585 million for manufacturing and N$ 452 for the tourism as at the end of March 2017.The transport and logistics sector received allocations of N$2,804 million. These sectors were identified as key to economic development in terms of NDP4, and are still noted as key sectors in NDP5. The Bank does not engage in direct lending to primary agricultural projects, but it does finance agro-processing businesses.
Inkumbi continues by saying that largest regional allocation went to Erongo (N$2,968 million), followed by Khomas (N$524 million) and Omaheke (N$172 million). Projects crossing regions received N$120 million in approvals. In the densely populated northern regions, Oshana led approvals with N$143 million, followed by Omusati with N$130 million.
Leaders and captains of Namibian industry will gather on 15 November 2017, to applaud the best of Namibian enterprises and innovation, as the Development Bank of Namibia once again hosts the prestigious Good Business Awards and Innovation Award. Join us in recognising Namibian excellence, financed and supported by the Development Bank of Namibia.
The Development Bank of Namibia (DBN) will introduce its financing for enterprise and infrastructure – and requirements for financing – from 09.10.2017 to 13.10.2017, in Hardap and //Karas.
Potential borrowers for large and SME enterprises are invited to attend information sessions to be held in the following towns :
Rehoboth Community Hall
10h00 AM - 11h00 AM
Monday - 09.10.2017
11h30 AM - 13h00 PM
Tuesday - 10. 0.2017
Lüderitz Nest Hotel
11h30 AM - 13h00 PM
Thursday - 12.10.2017
Zacharia Lewala Community Hall
12h00 PM - 16h00 PM
Friday - 13.10.2017
Development Bank of Namibia (DBN) CEO Martin Inkumbi has announced that the Bank will resume financing for SMEs. The announcement follows in the wake of the suspension of operations of SME Bank.
Talking about the resumption of SME finance, Inkumbi says that due to the gap in the market for finance, the Bank and the Minister of Finance, Hon. Calle Schlettwein, the Bank’s shareholder representative, have agreed that DBN should take the necessary steps to resume its financing activities for SMEs.
Inkumbi says that the Bank has the capacity, the necessary pool of capital, as well as the ability to redirect human resource capacity to fill the gap. Previously, the Bank shifted its focus to providing finance for larger enterprises. Inkumbi, however, states that the Bank has maintained its stable of SME borrowers that it developed prior to the shift in focus, and that new borrowers will be inducted into the current system.
Asked about what SME borrowers can expect from DBN, Inkumbi says that new applicants will be required to demonstrate viability of proposals for finance in terms of the Bank’s assessment process, including business plans, the necessary human resources to maintain operations, willingness to share risks with the Bank, and consideration of aspects of risk entailed in individual applications.
Asked about new elements that may impact SMEs, Inkumbi notes that DBN has put in place an environmental and social management system to ensure adherence to relevant environmental and social legislation, and to minimize negative impacts on the environment.
He also says that the Bank has introduced a client support function which can provide coaching and mentorship to further develop capacity for SMEs.
On the topic of the current SME Bank borrowers, Inkumbi states that DBN will not necessary be taking over existing loans, but will consider new financing requirements to start and or expand business activities. All applications for finance will be subject to DBN’s normal due diligence process. This process, he explains, was established, and has been tested and refined over the years, since the Bank’s inception in 2004.
All applications for SME finance will be treated on individual merit, based on the appraisal of the Bank’s Portfolio Managers, as well as its Credit and Risk Committees. Inkumbi directs potential applicants to the Bank’s website, www.dbn.com.na, where they can find out more about the requirements for borrowing and download application forms.
The Bank, Inkumbi concludes, is aware of the importance of SMEs for the economic development of Namibia. Consequently, successful applicants for SME finance can expect more in terms of support.
The Development Bank of Namibia (DBN) issued the first notes under its N$ 2.5 billion Medium-Term Note Programme on Tuesday 5 September and raised a total amount of N$ 291 million.
The programme is part of the Bank’ strategy to diversify its source of funding and raise money on the market for on-lending to financially viable, environmental, and socially acceptable projects with developmental impact in line with the Bank’s business plan.
The 3-year bond (series “DBN20”) was issued through an oversubscribed auction process that was held on 31 August 2017. The bond pays a floating rate coupon quarterly, linked to the JIBAR rate and will mature on 4 September 2020.
The issue marks the first time that the Bank has formally approached Namibian capital markets to raise funding, and depending on future cash flow requirements, the Bank will be a regular issuer in the Namibian capital markets going forward. This is indeed a momentous occasion for the Bank which signaled market confidence in the Bank.
The Bank had planned to raise between N$200 million and N$ 300 million on its debut bond issue, and was well supported and oversubscribed by 26 staggered bids from 13 different investors both in Namibia and South Africa.
The total subscription amounted to N$ 428 million, and DBN issued a total amount of N$ 291 million at a spread of 190 basis points over the current JIBAR.
The Development Bank of Namibia’s N$2.5 billion Medium Term Note Programme aims to provide an alternative source of funding which forms part of the board approved funding strategy, in line with the bank’s targeted gearing ratio.
DBN has been well capitalized over the years by its sole shareholder- the Government of the Republic of Namibia, but now recognises that it needs to leverage its unencumbered balance sheet.
The Bank has also recently established a treasury function to manage its liquidity and funding needs, and is building an active presence in the Namibian money and capital markets in the realization of one of its core mandate.
The Development Bank of Namibia obtained a Long-Term Issuer Default rating of BBB- and National scale rating of AAA(zaf) by Fitch ratings.
This rating is equal to the sovereign (Government of the Republic of Namibia).
Development Bank of Namibia (DBN) CEO Martin Inkumbi has reiterated the Bank’s support for the manufacturing sector. The Bank is currently engaged in a drive to stimulate the sector with finance, and is reaching out to existing manufacturers with expansion plans, and potential manufacturing start-ups.
Inkumbi states that more consumption of locally manufactured goods is required to grow the local manufacturing sector. He adds that charity starts at home, and that to stimulate the sector, both public and private procurement policies and practices should give preference to goods that are produced locally.
This has benefits such as local employment creation and also improving the country’s balance of payments. The cost of a cheaper imported products can be much higher to the Namibian economy than the market price of that product, when lost employment opportunities and drains on the balance of payments are taken into account, he explains. Local value chains must be grown by procuring and consuming locally produced goods wherever possible.
Inkumbi says that the Bank believes that manufacturing can benefit from opportunities through import substitution, in line with NDP5 and the Growth-at-Home strategy. By seeking opportunities, and exploiting them, Namibian manufacturers can make progress towards achieving economies of scale.
This, will also be augmented by the ambitions of manufacturers to penetrate regional markets. Concerning regional markets, Inkumbi states that although South Africa and Angola are experiencing recessionary economic environments, there are opportunities in other countries in the SADC. He says that economic contraction is a cyclical phenomenon, and that the upward trend of growth resumes in the long-term.
He points out that a viable manufacturing enterprise will have the scope to increase its output in future, and encourages entrepreneurs with plans to initiate them now, rather than delay at the expense of future productivity.
In addition to DBN finance applied to local start-ups and expansion, Inkumbi notes that the Bank also makes the offer of trade finance. Regional expansion can be a costly exercise, however with availability of capital for expansion, cross-border ambition should be seen as an investment in long-term returns.
Talking about the Bank’s support to manufacturing, Inkumbi says that the Bank’s lending terms are competitive for manufacturers, however the Bank has expanded its own philosophy to encompass support in the early application phase as well as post borrowing.
In certain instances, where the Bank identifies strong development impact potential, the Bank will make available expertise and financial support for studies and knowledge gathering through its Project Preparation Fund (PPF). The aim of the PPF is to secure the viability of the project and seek means to mitigate risks prior to borrowing.
The Bank also provides access to a network of consultant business professionals who assist with capacity development after lending. This can be used to develop skills or streamline and strengthen operations to the benefit of the borrower.
Talking broadly about access to finance for manufacturers, Inkumbi says that manufacturing enterprises face challenges attaining the optimal financing mix. DBN’s experience indicates that manufacturing enterprises with a higher equity capital in the financing mix tend to do better than those funded solely with debt capital. Manufacturing enterprises require a longer period to achieve break-even, given the complexity of their environments and the need to secure markets for their products.
Inkumbi also points out that the Bank may, at its own discretion, recommend a repayment holiday for manufacturers on interest, capital or both, depending on the requirement of the borrower, the project's cash flow and factors which become apparent in the application assessment.
Talking about indirect benefits to commercial sources of finance, he goes on to say strong manufacturing base will improve the economic ecosystem, and this will also improve long-term prospects for the financial sector, which is a good reason for all financiers to support manufacturing enterprises. He adds that the DBN will consider financial syndication to spread risks.
This however, must be supported by local procurement policies and practices, and financiers should encourage this among their own clients, in effect creating networks of procurement centered on the encouragement and policy of the provider of capital. If local consumers buy more local goods, this will result in higher sales revenues and better profitability for local manufacturers, which will makes it easier for local manufacturers to obtain finance from financiers.
Addressing manufacturers directly, he says that the Bank has a sound track record in financing the manufacturing sector, which includes cement, food processing, manufacturing of plastic goods, printing and agri-processing. Since its inception, the Bank has provided N$1.15 billion in finance to the manufacturing sector.
Manufacturing requires vision and ambition, and the Bank recognises this, and has commenced engaging local manufacturers, to better understand their challenges in raising capital. Manufacturers who have ambition and plans should make use of the Bank’s open door, and expect more, Inkumbi concludes
In the wake of recent reports of lapses in repayment of debt on small and medium enterprise loans issued with the purpose of enhancing Namibia’s development, economic activity and prosperity, DBN Senior Communication Manager Jerome Mutumba has clarified important aspects of mutual responsibility for lending and borrowing, which must be factored into the concept of development finance.
Mutumba says that there is a distinction between finance for development and commercial finance. Finance for development will typically be allocated with the goal of supporting and enhancing economic activity, while commercial finance will have the goal of achieving returns for the lender, without the narrower requirement of producing development. Both, however, will have the prerequisite of returns to capital, in order to sustain their operations. In the event of loans which are not repaid, both development and commercial finance will fail.
In making the choice between sources of commercial or development finance, the borrower will envisage the same outcome, regardless of the source of finance: a viable enterprise that will be a source of personal growth and income. The choice of lender, on the other hand, may influence the terms of the loan in favour of the borrower. A development finance institution (DFI) may, for instance, accept a greater degree of risk, offer capacity development services to borrowers and, under exceptional circumstances, offer flexibility on contracted terms of repayment.
In order to qualify for a DFI loan, the borrower has to recognise the goals of development finance, and ensure that she or he can fulfill those requirements. The first cut decision of development finance will be a clear indication that the borrower can satisfy the terms of the loan. If not, the borrower will not be able to satisfy development goals, such as employment, development of capital, economic activity and other factors.
As a lender, the DFI will have the additional consideration of its own sustainability. It has the moral and economic obligation to preserve its own capital, as well as collect interest, which will be used to sustain and grow its operational capacity, by providing more loans to a greater number of borrowers.
In this way, the agreement between the borrower and the DFI must be mutual, to produce the best possible outcome for both.
Mutumba points out that as the benefits of development finance are allocated from a common resource, such as the national coffers, with the broader goals of development benefits that extend beyond the owner and the DFI, the finance is at the heart of an ubuntu in which the benefit extends beyond the two parties to the loan. Both entities have to be aware of the ubuntu.
Talking about the successful approach of the Development Bank of Namibia (DBN), Mutumba says the Bank not only ensures the integrity of its lending through governance, but also through cooperation with borrowers after the amount has been disbursed.
Governance surrounding the lending process is exercised through a stringent due diligence process prior to approval of loans, which includes factors such as qualification and skills, and willingness to offer collateral, in addition to the standard elements of business planning and development impact.
Mutumba stresses that development finance is a privilege, and that not all applications can succeed, only those that deliver the greatest impact in terms of the Bank’s mandate. Although the Bank may receive many good applications it regretfully has to reject some in favour of those that are the best of the best.
Due to the quality of assessments of applications for finance, the diligence process will identify areas of risk. In these cases, DBN recommends mitigatory measures to applicants, or rejects the application. Where a project is judged to have remarkable development benefits, the Bank may choose at its own discretion to assist the applicant with development of the proposal through its Project Preparation Fund.
Post-lending, Mutumba says that the Bank maintains relationships with borrowers. In addition to monitoring of repayment, visits can be used to ascertain that the application of capital disbursed by the Bank is used for the purpose for which it is intended.
When enterprises do experience difficulty, this is generally, rapidly identified by the Bank, at which stage the Bank will approach the borrower to examine the source of the impairment and try to rectify the situation, rather than proceed to declare the amount a bad debt and recover it through a legal process.
The Bank, he says, does not have the intention to immediately recover its capital, rather to strengthen and improve the enterprise to preserve the development impact that was presented in the successful application.
Mutumba goes on to say that when the Bank has experienced difficulty with loans, it is often as a result of a lack of administrative skills and capacity. The Bank, he says, has taken steps to rectify this with the implementation of a client development function which provides capacity building in the form of mentorship and coaching, through a network of experts in various fields on business management.
Mutumba concludes that the Bank’s track record shows that the partnership between it and its borrowers is sound, and provides developmentally beneficial results. However, he challenges stakeholders to use the Bank’s anti-fraud mechanism, if they believe there are irregularities in transactions.
Development Bank of Namibia (DBN) CEO Martin Inkumbi has announced the Bank’s new positioning, “Expect more.” He says the new positioning statement reflects both the Bank’s transformation, as well as its ambition for the future.
In terms of the transformation, Inkumbi says the Bank has grown substantially since its inception, and evolved.
In terms of size, the Bank is now custodian of assets of approximately N$11 billion, a resource which is continually deployed to nurture larger scale projects consisting of enterprise and / or infrastructure. The Bank, Inkumbi says, is expected to play a larger role in finance for development, based on its growing capacity.
He adds, that the Bank has made significant progress in sourcing capital through issues notes and lines of credit from the external private sector and institutional entities.
Concerning evolution of the Bank, Inkumbi says that DBN has adopted mechanisms such as an advanced enterprise-wide risk management framework, as well as an environmental and social management system that better enable it to manage the risks inherent to financing startups in a dynamic economic environment. He adds that the Bank is currently implementing a treasury function to further strengthen its liquidity and capital raising capacity.
In this case, he explains that stakeholders and borrowers may expect more by virtue of a deeper pool of capital, but should also expect robust risk management, in keeping with the Bank’s objective of maintaining financial sustainability. The Development Bank is a national asset, Inkumbi adds, and has the duty to preserve and sustain itself, as well as grow.
In terms of its impact on enterprises, Inkumbi says, in addition to the ability to finance larger projects from a deeper pool of assets, the Bank now gives more support to its borrowers and potential borrowers who require such support through a formalized mentoring and coaching program. He describes this as a combination of advisory services prior to landing, and capacity strengthening and development through a network of business experts.
He says that each enterprise and project is regarded not just as a financial asset, but also as an asset for the Namibian economy, and so the Bank’s philosophy is to provide the additional support in order to mitigate risks that arise after lending, and ensure the long-term viability of the initiative that the Bank finances.
Internally, Inkumbi says he believes that the new positioning will have a galvanizing effect on staff. The Bank, he says, provides an exceptional environment for personal development, and this has been the basis for a high degree of motivation, and high level of expertise. The Bank’s staff are driven by the concept of personal excellence, however, he believes that the new positioning will drive members of the team to expect even more from themselves.
Asked how he sees the future of the Bank, Inkumbi states that the Bank will strive to respond to the priorities of the Harambee Prosperity Plan as well as the expected Fifth National Development Plan. The Bank, he says, also responds to emerging economic priorities, such as the need to provide social infrastructure such as affordable residential land and housing in line with the Government’s development programs. The Bank’s future will be guided by the needs of the nation, and the goal of sustainable development. In light of this, he concludes, the best forecast for the Bank is to expect more.
Development Bank of Namibia (DBN) Senior Communications Manager Jerome Mutumba has announced that the Development Bank of Namibia has provided finance for African Deli, a start-up food exporter at Walvis Bay, in the Erongo Region.
African Deli will manufacture ready-made traditional African meals using beef, lamb and chicken. This will include beef and lamb matangara, which is known as mogodu in South Africa. The DBN finance is being used for plant and equipment.
Says Jerome Mutumba, Africa Deli came to the Bank with an impressively researched proposal. In terms of in-depth consumer demand studies, and following recipe development, Gauteng Province, with 8,3 million potential consumers, was identified as the ideal market penetration point, with the rest of South Africa, followed by SADC member states, as next steps in the company’s expected expansion.
In terms of product appeal, Mutumba says the product is targeted at the emerging middle class, who have strong links to traditional culinary culture, but limited time for the lengthy preparation process required for traditional meals. Africa Deli’s products are packaged in microwaveable pouches, which saves a considerable amount of time in preparation of the meal.
He goes on to say that ready meals have been dominated by European and Mediterranean culinary styles, and the Bank is proud to be associated with an addition to the range of African foods available on shelves. Talking about African cuisine in retail, he points to chakalaka as an example of successful uptake of a traditional African dish. Africa Deli’s range of meals can add to the range of products.
Concerning the location of the factory in Walvis Bay, Mutumba says the location is ideal as it provides access through SADC corridors, as well as maritime shipping routes. The set of industries in Walvis Bay can provide an excellent ecosystem for African Deli, with transport and logistics featuring strongly in the Port’s favour. Walvis Bay is also well-positioned to receive unprocessed ingredients required for manufacturing of the meals.
Mutumba notes that the company is a perfect example of DBN’s financing ambition. Manufacturing has been singled out as one of the key elements of the Harambee Prosperity Plan (HPP). As African Deli is both a manufacturer, and exporter, and will require inputs from local agriculture and agri-industry, as well as transport and logistics, the benefits of financing the company will spread to other sectors of the economy.
He encourages other entrepreneurs in the Erongo region to approach the Bank’s office in Walvis Bay to discuss their ambitions and find out about the Bank’s requirements.
Mutumba concludes by saying that Erongo is a region that keeps on giving to Namibia’s national economy, and the Bank treats it as a gateway for development in light of this. In the period between 2004 to January 2017, the Bank has provided more than N$4,4 billion in finance to the region. In line with its national gateway status, the majority of that finance, N$3,3 billion was allocated to transport and logistics. This was followed by allocation of N$451 million to the electricity sector and N$197 million to business services.
Development Bank of Namibia (DBN) Erongo Portfolio Manager, Simeon Unotjari Kahona, has announced that the Bank is seeking opportunities to stimulate more demand for finance in the Erongo region.
In terms of the Bank’s additional focus on infrastructure and business projects, identified in the Harambee Prosperity Plan (HPP), the Bank will seek out projects promoted by private entrepreneurs, through public private partnerships (PPPs), as well as projects identified by the regional council and local authorities. However the Bank will also seek to finance projects that are unique to the economy of the Erongo region.
Talking about the requirement for energy, noted in HPP, Kahona says that the Bank has advanced N$280 million to Erongo RED to ensure supply of electricity, financing was also advanced for Arandis solar project and is also engaged in project finance to secure bulk fuel supply for Namibia.
Among the additional projects that the Bank envisages financing are local authority projects, through PPPs, to develop serviced land, for affordable housing. Kahona adds that the Bank will also finance social infrastructure in Erongo, noting that economic development should walk hand-in-hand with socio-economic development, if greater levels of economic activity are to be of benefit to citizens of the region.
Kahona also says that the region has the potential to strengthen its own internal economy to serve the needs and wants of its enterprises. The Bank believes there is more opportunity to finance light engineering industry that services marine enterprises and the transport and logistics sector, the developing energy sector, and the marine products processing subsector. These projects should have an annual turnover, or projected annual turnover, of N$10 million or more.
In terms of local consumer demand, Kahona announced N$25 million in finance for local food manufacturing, for African Deli, an enterprise established to manufacture instant meals with an African flair. This, he says, shows that there is potential in Erongo to fulfill regional demand, that can extend nationally and further into the SADC market.
Kahona concludes by saying that Erongo is a region that keeps on giving to Namibia’s national economy, and the Bank treats it as a gateway for development in light of this. In the period between 2004 to January 2017, the Bank has provided more than N$4,4 billion in finance to the region. In line with its national gateway status, the majority of that finance, N$3,3 billion was allocated to transport and logistics. This was followed by allocation of N$451 million to the electricity sector and N$197 million to business services.
Development Bank of Namibia (DBN) Senior Communication Manager, Jerome Mutumba, has announced that a team from the Bank will be visiting Otjozondjupa to stimulate demand for finance in the region, as well as to visit DBN customers. The team will be led by DBN CEO Martin Inkumbi.
DBN recently announced its additional focus on infrastructure and business projects which are aligned to the pillars of the Harambee Prosperity Plan (HPP). The visit is intended to shed further light on opportunities for finance for the sectors, which include energy, water, transport, and ICT. The Bank will seek to finance projects in these sectors, promoted by private entrepreneurs, through public private partnerships (PPPs), as well as projects identified by the regional council and local authorities.
Talking about the value of development finance for Otjozondjupa, Mutumba says that the region has the potential to become a hub of economic activity and a major source of value to the economy of Namibia. He says that not only does the region act as a link between the productivity of Erongo, Khomas and the northern regions, but it also has the potential to provide goods and services for the regions around it.
He cites the example of Ohorongo Cement, in which the Bank holds shares. Although conventional wisdom would seek to place a large manufacturing enterprise such as Ohorongo in the Khomas or Erongo Regions, the company uses the central location of the Otjozondjupa Region to reach multiple regions with a reduced logistical chain, and makes use of the local resource. This, in turn, has stimulated the region with employment, and associated economic activity.
Mutumba adds that the region has the potential to strengthen its own internal economy to serve the needs and wants of its inhabitants. The Bank, he says, is also seeking to finance Otjozondjupa projects with an annual turnover of N$10 million or more in the fields of manufacturing, transport and logistics, and tourism.
The Bank is targeting Otjozondjupa loans for agri-processing, tourism, and manufacturing enterprises that will create mass employment.
In the period between 2004 to January 2017, the Bank provided N$615 million in finance to the Region. The largest allocation went to Otjozondjupa’s manufacturing sector, at N$243.36 million, which includes Ohorongo cement. This was followed by N$187.4 million for construction, and N$145.1 million for electricity. The allocation to electricity includes the successful Omburu Sun project, which pioneered solar energy production through the independent power production model that is currently being rolled out across Namibia, as well as its sister project, Osona Sun.
The Bank will conduct information sessions to familiarize stakeholders on its activities, and how to apply for larger enterprise finance. These will take place on Monday, 27 February, at Okahandja Country Lodge, from 16h00 - 17h00, Tuesday 28 February at Out of Africa in Otjiwarongo, from 11h30 - 13h30, and Thursday, 2 March at Peace Garden Lodge in Grootfontein from 11h30 - 12h30.
Development Bank of Namibia (DBN) CEO, Martin Inkumbi, has announced that the Bank is prioritising infrastructure and business projects which are aligned to the pillars of the Harambee Prosperity Plan (HPP).
The priority infrastructure areas, to which the Bank may contribute with finance, are energy, water, transport and ICT. The Bank will consider projects in these areas, promoted by private entrepreneurs, through public private partnerships (PPPs), as well as public institutions such as SOEs.
He illustrates the difference by pointing to finance for Erongo RED to secure power supplies at the coast as an SOE, and finance for Omburu Sun Energy as a utility owned and operated by a private sector entity.
Inkumbi says the prioritisation is not a shift away from the Bank’s focus on key sectors identified by National Development Plan 4 (NDP4), but an additional focus for the Bank. The Bank will continue to provide finance for larger enterprises, with annual turnovers of more than N$ 10 million, in the key NDP4 sectors of manufacturing, transport and logistics, and tourism.
He adds that the Bank’s historical track record closely matches the requirements of HPP. The Bank, Inkumbi says, has been active, since inception, in HPP priority areas such as social progression (the 3rd Pillar of HPP) through financing the delivery of serviced land and housing, and improvement and expansion of education and health services, through finance to private educational institutions and private medical services providers.
Talking about other aspects of transformation entailed in HPP, Inkumbi says although the Bank seeks returns to sustain its activities through repayment of finance with interest, as well as capital preservation through the requirements of collateral and /or guarantees, it also contributes to socio-economic transformation through its corporate social investment programme without expectation of returns.
Asked about financial sustainability in light of the current realignment of fiscal resources by the Government, Inkumbi says the Bank is one of the agencies that can fill the temporary gap in provision of finance, provided that projects are in line with the focal areas of HPP.
He goes on to say that project planning and implementation timelines, justify immediate contact with the Bank. The Bank has its own processes and expertise for assessment of large scale infrastructure. By approaching DBN early, project initiators can ensure that financial resources are available, when required, and that the Bank can assist with risk mitigation with the experience that it has developed through financing multiple large-scale projects and enterprises over the years.
Inkumbi concludes by saying that the Bank provides access to services not just in Windhoek, but also in the hub economic centers of Ongwediva and Walvis Bay. He encourages project initiators to make use of DBN’s open doors to further Harambee with projects that fall within the Prosperity Plan’s focal areas.