Financial Cooperation Agreement German Government continues its support to Namibia’s sustainable development efforts

Signing of Financial Cooperation Agreement

Signing of Financial Cooperation Agreement, © German Embassy, Windhoek

11.05.2021 - Press release

On 11 May 2021, Honorable Iipumbu Shiimi, Minister of Finance of the Republic of Namibia, and H.E. Herbert Beck, Ambassador of the Federal Republic of Germany, signed the Agreement on Financial Cooperation for Loans following the 2019 Governmental Negotiations on Development Cooperation between Germany and Namibia.

The agreement covers three programmes to the value of EUR 100 million (approx. N$ 1.8 billion) for which financing will be provided by interest-reduced loans in local currency, thereby securing favourable credit conditions for the Government of Namibia. These projects will support the development of important water and other climate related infrastructure projects in Namibia, and the promotion of agricultural households and micro, small and medium-sized enterprises through Agribank. The funding for the three projects under this agreement is provided by KfW Development Bank.

Securing Windhoek Water Supply

EUR 50 million (approx. N$ 900 million) will be provided for the upgrading of the water infrastructure in Windhoek by modernizing and extending the Gammans waste water treatment plant. The investment will allow to more than double the capacity of the plant from 25,000 m³ to 55,000 m³ of water treated per day. This will safeguard the provision of the needed quantity and quality of water as feed stock for water reclamation as one of the backbones of water supply to the city.

This project will complement the ongoing support provided by the German development cooperation to the City of Windhoek in implementing its long term strategies to ensure the supply and most efficient use of water for its citizens. This includes already a EUR 40 million (approx. N$ 720 million) interest reduced local currency loan provided for the construction of an additional Direct Potable Reclamation Plant in Windhoek as well as a grant to identify measures to reduce water losses in the city’s water supply and sewage System.

Boosting infrastructure based on climate-friendly Technologies

EUR 30 million (approx. N$ 540 million) will be provided to extend an existing credit-line to the Development Bank of Namibia (DBN) for climate related infrastructure projects in Namibia. The facility aims to improve access to long-term finance for both private and public investors at incentivized conditions for climate-related infrastructure projects like solar photovoltaic and wind energy generation as well as rural and urban water infrastructure and public transport projects. This second credit-line provided via KfW will support the further expansion of DBN’s business activities and will be accompanied by capacity building measures for DBN to ensure compliance to international environmental and social standards.

Improving food production, income and employment opportunities in rural communities

EUR 20 million (approx. N$ 360 million) will be provided for a credit-line to the Agribank of Namibia to sustainably and efficiently expand the range of financial services available to agricultural households and micro, small and medium-sized enterprises. The credit line will support the development of new and innovative financial products to unlock access to affordable finance especially for small-scale farmers. This credit-line provided via KfW will be accompanied by a grant for capacity development to secure the successful implementation of the program.

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