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Treasury offers security for mass housing borrowings

2015-02-17  Mathias Haufiku

Treasury offers security for mass housing borrowings
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By Mathias Haufiku WINDHOEK- Finance Minister Saara Kuugongelwa-Amadhila says government stands ready to provide guarantee for borrowings undertaken by the National Housing Enterprise (NHE) to raise money needed for the N$45 billion Mass Housing Development Programme. In a report submitted to government last month, NHE outlined the need for government guarantee to enable it to access affordable debt financing as one of the six strategic issues “that require strict attention”. Mass housing has in recent months been struggling to hit full throttle after encountering several financial hiccups, with NHE currently owing contractors N$159.6 million for work done on the project. “Government stands ready to issue the guarantees, provided that all issues are in place. That principle was agreed upon with NHE and we told them that they must identify sources which they can afford to borrow money from and the state will issued the guarantee,” Kuugongelwa-Amadhila told New Era yesterday. The minister said it is solely up to NHE to source funds because government did not make any funding commitments. “Cabinet has committed to provide security and NHE indicated that they are trying to identify borrowing agents. Government can only issue the guarantee once the borrowing is secured. Right now the ball is in NHE’s court,” she said. When asked whether government has set any borrowing restrictions such as a maximum borrowing amount, she said: “NHE wants to raise N$2 billion for the first phase and that is the amount which government has committed to guarantee.” In December last year NHE submitted a borrowing proposal amounting to N$2 billion to the line ministry, consisting of the proposed term sheet, business plan and financial projections. When contacted yesterday to shed some light on possible borrowing restrictions, regional and local government minister Charles Namoloh said his ministry would convene a press conference to interact with the media on several issues within the ministry. New Era yesterday reported that NHE has thus far only paid N$435.1 million for the construction of houses under the mass housing programme in the country, and had a payable amount of N$594.7 million as of December 31, 2014, with an additional N$159.6 million still pending for payment. In addition, an amount of N$49.6 million for land servicing is also owed to contractors as at 31 December 2014. The total number of houses constructed to date stands at 1214 , although there were 3345 houses still under construction by December. A total 10 043 houses are to be constructed in the first phase of the N$45 billion mass housing programme through which 185 000 houses are expected to be constructed by 2030.
2015-02-17  Mathias Haufiku

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