Finance minister Ipumbu Shiimi and Ambassador of the Federal Republic of Germany Herbert Beck on Friday signed a financial cooperation agreement on interest-reduced loans between Germany and Namibia.
The total amount of the agreement is €161 million (roughly N$2.7 billion) and comprises three major areas of German-Namibian development cooperation.
The total funding of N$2.7 billion is provided by the German government and forwarded to KfW Development Bank for implementation.
The three projects are intended to directly contribute to the achievement of HPP II and the updated NDC helping to kick-start growth after the severe impact of Covid-19 crisis.
This first project is a NamPost funding facility of up to €20 million (N$334 million) to support micro and small enterprises (MSE) and low income households in overcoming the Covid-19 crisis.
Second is the water sector support program II, which receives up to €75 million (N$1.25 billion).
Last is the renewable energy programme that will get up to €66 million (N$1.1 billion).
According to a joint media release, the NamPost Funding Facility aims at providing microcredits to predominantly rural customers – mainly women.
The interest-reduced local currency loan to NamPost/PostFin addresses the high demand for credit of vulnerable groups and provides access to loans specifically to alleviate the negative consequences of the Covid-19 pandemic.
The Water Sector Support programme II is additional funding for the ongoing Namibian Water Sector Support programme.
The continuation of support intends to make a direct contribution to Namibia’s adaptation to climate change.
“The programme is aiming at the implementation of new water projects to improve access, quality and sustainability of water supply and sanitation in Namibia. Against the backdrop of more frequent droughts, the programme strives also to reduce water losses, thereby contributing to resource conservation and increasing the resilience of the population,” reads the joint statement.
The Renewable Energy programme aims at supporting NamPower to expand its production capacities in terms of renewable energy.
The project will establish the first major windfarm in Namibia with a capacity of up to 40MW, located 30km north of Rosh Pinah.
This major windfarm provides a valuable learning experience for NamPower.
It supports the ambitious NamPower targets to increase the supply of renewable energy and improve the country’s energy independence.
In addition, the project contributes to Namibia’s aspirations of becoming a hub for the production of green hydrogen.
At the signing, Ambassador Beck said: “I am confident that the agreed areas of our bilateral financial cooperation will make a real difference to the people of Namibia, as they will contribute directly to the implementation of the Harambee Prosperity Plan, the government‘s economic recovery and development plan”.
He noted the enduring bilateral development cooperation is a central component of the special relations between Namibia and Germany – and a continuous support to the Namibian government.
During 30 years of Namibia’s independence, German development cooperation with Namibia amounts to €1.6 billion (roughly N$26.8 billion).
Most of this assistance has gone towards strengthening the country’s social and economic growth.
At the signing, finance minister Shiimi said: “Namibia is very grateful for the continued support from the Federal Republic of Germany. The agreed financial support is for strategic investments in critical areas that will help the economy to recover, and it will come in handy to help us build back better”.