NEDBANK Namibia is committed to the financing of projects that bring economic development to the country, and roads are an important catalyst for the economic development of Namibia.
This was revealed last when Nedbank Namibia advanced a loan of N$350 million to the Road Fund Administration (RFA) to finance the Low Volume Road Seal Strategy (LVRSS).
The RFA sought debt funding in order to execute the LVRSS. The strategy intends to upgrade highly trafficked gravel roads to a low volume bitumen seal. The LVRSS is an alternative maintenance strategy to optimize the available funding by doing more road maintenance work with limited financial resources.
“We are confident that this loan will add value to the transport and logistics sector in the country,” Nedbank Namibia Managing Director, Martha Murorua said adding, “The funding agreement with the RFA illustrates our commitment to playing our part in seeing the Namibian economy grow. Good roads play a crucial role in overall economic development. At Nedbank Namibia, we have no doubt that the -loan will add value to the transport sector in the country and further stimulate economic activities in other secondary and tertiary sectors.”
Mororua also said: “We initiated the relationship with RFA in 2016 and Nedbank Namibia has become a key partner in their business, and the debt funding is the first step towards furthering the partnership with the RFA. We believe that there is room to further advance this relationship and partnership with the RFA”.
The main objective of the LVRSS is to improve the level of service on gravel roads to the road users, resulting in reduced vehicle operating cost and time saving. The overall maintenance demand is also reduced leading to cost savings in a number of routine maintenance activities.
Low Volume Sealed Roads (LVSRs) differ from a higher standard bitumen sealed roads as they are normally of lower geometric standards, i.e., horizontal and vertical alignments are not improved and follow the natural terrain. LVSRs are designed for less than a 15-year design life. The upgrading of low trafficked gravel roads to appropriate bitumen surfaced standards is a viable solution to reduce the increased cost of unsealed road maintenance and preserve scarce road building materials.
In addition, the upgrading of roads to Low Volume Seal standards has wide-ranging benefits, which includes, an increase in road user satisfaction and reduction of vehicle maintenance costs, reduction in dust emissions, improved road safety, access to communities and improved vehicle/driver efficiency that reduces fuel costs.
The RFA ranks amongst the top performing state-owned enterprises in Namibia, with good corporate governance and a healthy financial position. The RFA’s mandate is to manage the Road User Charging System (RUCS) and the Road Fund (RF), with the aim of recovering from road users the full cost of road expenditure in an equitable manner. The system determines the amount of funds and the way the money should be raised from road users in accordance with the “user pay” principle.
“Due to budgetary constraints, it has become a serious challenge to adequately maintain the gravel road network. Consequently, the road network is in poor condition and continuously deteriorating. Indications are that if we do not act promptly, the situation will deteriorate to a point where 75% of the gravel road network is projected to be in a poor-to-very poor condition by 2025,” explained the RFA CEO, Ali Ipinge.
Namibia has a road network of approximately 49,000 km, valued at N$ 101 billion, of which about 90% is unpaved. Since inception, the RFA has invested more than N$20 billion in road infrastructure. Namibia ranked number one in Africa and 21 in the world in terms of quality of road infrastructure.