Rudolf Gaiseb
The local government has secured a N$1.5 billion loan from Germany, an amount earmarked to solve the water supply challenges faced by northern communities.
Minister of Finance Ericah Shafudah, in Parliament on Wednesday, said the loan agreement falls under projects financed outside the budget and will be implemented over the medium-term expenditure framework period.
“This concessional loan is a tangible outcome of the ongoing collaboration between our two nations,” she said.
The loan is administered under the Water Sector Support Programme 2 and the four projects executed by the Namibia Water Corporation (NamWater).
The first project is the Omundaungilo-Omutsegwonime Bulk Pipeline Scheme (Phases 1 and 2), a greenfield initiative involving the drilling of production boreholes, development of wellfields, and construction of approximately 130 km of new water pipelines.
Secondly, the project for replacing the Oshakati-Ondangwa-Oshali-Omuthiya-Omutsegwonime Pipeline (Phases 1 and 2).
“With rising water demands and in anticipation of the Oshakati purification plant upgrade (which sources water from Calueque, Angola, 150km away), this project addresses infrastructure bottlenecks. Phase 1, Ondangwa to Oshali, began in 2023 and is self-financed by NamWater, while Phase 2 will modernise remaining components of the South-East water supply scheme to serve Omusati, Oshana, Ohangwena and Oshikoto regions over a 15-year horizon,” the minister said.
The third project is the Katima Mulilo Extension (Phase 2).
This project entails upgrading and extending NamWater’s bulk water infrastructure in Zambezi, enabling integration with downstream water schemes currently being implemented by the ministry of agriculture.
It builds upon the earlier interventions under the Water Sector Support Programme I, supported by an African Development Bank loan, the minister highlighted.
Lastly, small-scale desalination plants will be deployed on existing ministerial boreholes and shallow hand-dug wells.
The installations aim to rapidly improve access to potable water, enhancing the quality of saline groundwater across affected communities. Moreover, the loan terms and conditions consist of a 10.09% interest rate and a 20-year repayment period, including a five-year grace period. The minister acknowledged this interest rate is 2.3% lower than the local interest rate of similar maturity and provides a sufficient grace period to allow the construction of these projects before commencing with repayment.
The Deutsch government guaranteed the loan through the German Development Bank.
Meanwhile, the ministry explained that Namibia’s fight against water scarcity and dry climate persists.
The unpredictable and low rainfall poses significant challenges to water delivery, it states. The State has therefore prioritised the water sector after former president Nangolo Mbumba declared a national state of emergency early last year, saying, “It is the worst drought the country has experienced in 100 years.”Shafudah reported that, due to underinvestment in the sector, most of the country’s water infrastructure has become dilapidated and is beyond its usable lifespan. “In addressing these challenges, the government continuously engages the assistance of the development partners to seek funding at concessional rates,” she said.
She also indicated the government has so far secured funding for the upgrading of the Direct Potable Reclamation plant and the upgrades to the Gammams and Otjomuise wastewater treatment plants, the Oshakati Purification Plant Extension, the Rundu Purification Plant Replacement and the Ohangwena II Wellfield.
The projects’ implementations are progressing well, she highlighted.
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