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Caption: Sustainability for Nkurenkuru. Development Bank of Namibia CEO Martin Inkumbi (left) and Nkurenkuru COE Petrus Sindimba (right) recently formally signed an agreement in terms of which the Development Bank of Namibia will deploy its Project Preparation Fund to finance an N$2.5 million feasibility study for Nkurenkuru Extension 6.
Development Bank funds sustainability study for Nkurenkuru
The Development Bank of Namibia (DBN) recently signed an agreement with the Nkurenkuru Town Council for an N$2.58 million feasibility study, funded by the Bank’s Project Preparation Fund (PPF) for the town’s proposed Extension 6.
Talking about the need for the feasibility study, DBN CEO Martin Inkumbi said that local authorities are overarching agents of economic development. He explained that the overarching role entailed a range of impactful development points that contribute to economic activity and social development.
In terms of economic activity, Inkumbi said, this could consist of commercial and industrial activity, as well as infrastructure such as roads, power and water. Economic activity generates revenue streams to the local authority, which lead to funds for maintenance of the enterprise environment as well as further infrastructure development.
Social development, Inkumbi explained, consists of provision of social services such as health services, education and other associated services. It also consists of housing and community facilities that are required by residents. These too, he said, generate revenues to the local authority.
Nkurenkuru, Inkumbi noted, is the capital of Kavango West, Namibia’s newest region. However, he said that Kavango West is one of Namibia’s least economically active regions, and so it requires intensive development. Nkurenkuru, he explained, is the economic hub of the region. By developing the town, economic activity would spread to outlying settlements and areas in the region.
In light of the important role of Nkurenkuru, it is vital to understand that development be effective, and that development finance be applied correctly. He went on to state that by providing effective finance to the local authority, the Bank will ensure that its involvement has a sustainable, long-term development impact.
Concerning the study, Inkumbi said, that as the new extension has passed the litmus test of the Environmental Impact Assessment (EIA), the study will focus on commercial viability. This will entail examining demand for facilities envisaged by the existing plan, as well as affordability. If demand and affordability are uncertain, there will be a significant financial risk to the local authority and the Bank. By identifying and understanding the risks, the plan can be amended to mitigate the risks and ensure viability.
In terms of the project, Inkumbi said, it contains a significant allocation of serviced land for residential and business purposes, as well as, government, local authority and institutional entities, vital to delivering social services to the residents of Nkurenkuru and the Kavango West region.
Although provision of residential serviced land and housing is cast as one of the most pressing needs for development, it is vital to ensure that social wellbeing is provided for with provision for social development agencies such as ministries, local authorities and other institutions. Nkurenkuru has a pressing need for these agencies, and provision of serviced land is an immediate step to resolving the issue.
Understanding of how Extension 6 can be optimised, through a study funded by the PPF, is an important precursor step, Inkumbi continued.
Talking about the PPF, Inkumbi cast it as a vehicle for improving development impact of large-scale development projects. Funding from the PPF is used to make promising projects bankable by mitigating risks and improving feasibility. It is given on a grant basis, but once the project becomes bankable and receives finance the grant amount is incorporated into the main body of the loan amount and repaid.
Inkumbi concluded by expressing his hope that, in its final form, with any necessary amendments to improve feasibility, the Nkurenkuru Extension 6 plan would become a major contributor to and catalyst for development and economic activity in Kavango West.