2006-11-29Staff Report 2 "By Mbatjiua Ngavirue WINDHOEK The Development Bank of Namibia (DBN) has announced four new projects it is financing, to a total value N$36.75 million, with N$30.5 million of that amount going to new mobile phone operating company PowerCom. The remaining N$6.25 million is to be divided between Edu-Loan Namibia (N$4.75 million), Enviro-Fill Namibia (N$1 million) and Wendjizuva Pharmacy (N$500 000). Announcing the new loans DBN Chief Executive Officer, David Nuyoma, said the projects the DBN is funding are very diverse, but share features that makes the bank proud to be associated with them. At a media briefing yesterday, he said DBN extended a six-month guarantee facility of N$30.5 million to enable PowerCom's bankers to provide letters of credit for the shipment of equipment. Nuyoma said DBN is excited about the PowerCom project because, apart from creating 75 direct jobs, the mobile industry generates substantial economic benefits in terms of its contribution to GDP. The mobile phone industry, he added, also generates employment and government revenue through payment of various taxes and increased competition in the telecommunications sector. PowerCom was only recently granted a 15-year license to operate a mobile phone service in Namibia, which requires it to build a nation-wide network providing coverage to 95 percent of the populated areas of the country within a five-year period. Managing Director of PowerCom, Mac Allman, said he was very excited about the company's collaboration with DBN, as the bank would become the first new source of funding for the company after the original shareholder capital. Despite the shock-news that Telecom Namibia is surreptitiously entering the mobile phone market with its new Switch service, an upbeat Allman said he ""absolutely still believes in the Namibian market"". He pointed out that original projections for the mobile phone market in South Africa were 25 per cent market penetration, but today market penetration for mobile telephony in South Africa stands at 75 percent. Allman could not see why the same market penetration could not be achieved in Namibia, with PowerCom capturing a significant amount of the new market. For the first time however, the PowerCom MD conceded that the company will not be able to roll out its new service as early as it planned. He disclosed that the original planned launch of the service in early December would now be delayed until the actual start of the Christmas holiday period. ""It became clear to us that we need to make sure we are going to be able to have absolutely top quality service. We are not going to launch the system until I am sure the system is rock solid,"" he vowed. Nuyoma said DBN has purchased 475 bonds worth N$4.75 million to be used by Edu-Loan to extend loans to close to 230 Namibians. Edu-Loan Namibia (Pty) Ltd is a NAMFISA-registered lender that aims to provide what it decribes as ""socially responsible"" loans and thereby contribute to the economic empowerment of Namibians. It funds largely unsecured credit risk through personal loans. According to Nuyoma. Edu-Loan clients will benefit from the unique arrangement between the bank and the company, as Edu-Loan will pass the benefit of DBN's interest rate on to clients. Edu-Loan will do this by contributing the money being saved towards a bursary fund for the two years of DBN's investment in the debentures. In addition, he announced Edu-Loan will contribute a further N$200 000 towards the bursary fund, committing a total of N$400 000 that will be made available over a two-year period. Business tycoon Aaron Mushimba served as chairperson of Edu-Loan in its early days, but ceased any involvement when Namibian Harvest sold its interest in the company. Edu-Loan South Africa and a Namibian management group, including names such as Faan Bergh and Dr Willem Steenkamp, now jointly own the company. Another loan recipient Enviro-Fill Namibia has entered into a joint development agreement with the City of Windhoek for the extension of the lifespan of Kupferberg landfill site. The principals of the company are Anne Gebhardt, Samson Kaulinge, and Matthews Hamutenya. DBN provided a three-year bridging finance facility of N$1 million to Enviro-Fill Namibia to fulfil its contractual obligations to the City. Nuyoma said that although the project is not expected to create new jobs, the bridging facility would assist the company to achieve financial stability and retain the ten people in its employment. To the bank, he said, the project is also interesting because Enviro-Fill Namibia is a joint venture between South Africans and Namibians, with previously disadvantaged Namibians owning 48 percent of the shares in the company and also driving the company's operations. Wendjizuva Pharmacy (Pty) Ltd is 100 percent owned by Lorentia Wendjizuva Katjitae and has been in operation since June 2004. According to Nuyoma expansion of the pharmacy has, however, been hampered by a lack of capital to buy more stock. DBN issued a one-year payment guarantee of N$500 000 to Wendjizuva Pharmacy's creditors to enable the company to purchase stock through a revolving credit facility secured by the payment guarantee. Though no new jobs will be created, the facility will help retain five jobs. ""We are particularly thrilled by our involvement in this venture as it is a further step towards opening up the retail pharmaceutical industry to black economic empowerment participants,"" Nuyoma said." 2006-11-29Staff Report 2
