Ipumbu Shiimi, Minister of Finance of the Republic of Namibia, and Herbert Beck, Ambassador of the Federal Republic of Germany have signed a financial cooperation agreement on interest-reduced loans between Germany and Namibia.
The total amount of the agreement is roughly N$2.7 billion and comprises three major areas of German-Namibian development cooperation namely the NamPost funding facility in support of Micro and Small Enterprises (MSE) and low-income households in overcoming the COVID-19 crisis (Investment), up to 20 million Euro (334 million NAD), water Sector support program II, up to 75 million Euro (1.25 billion NAD) and the renewable energy program, up to 66 million Euro (1.1 billion NAD).
The NamPost funding facility in support of MSE and low-income households with up to 20 million Euro (334 million NAD) aims at providing microcredits to predominantly rural customers, mainly women. The interest-reduced local currency loan to NamPost/PostFin addresses the high demand for credit of vulnerable groups and provides access to loans specifically in order to alleviate the negative consequences of the Covid-19 pandemic.
The water sector support program II with up to 75 million Euro (1.25 billion NAD) is an additional funding for the ongoing Namibian water sector support program. The continuation of support intends to make a direct contribution to Namibia’s adaptation to climate change. The program is aiming at the implementation of new water projects to improve access, quality and sustainability of water supply and sanitation in Namibia. Against the backdrop of more frequent droughts, the program strives also to reduce water losses thereby contributing to resource conservation and increasing the resilience of the population.
The Renewable Energy Program aims at supporting NamPower with 66 million Euro (1.1 billion NAD) to expand its production capacities of renewable energy. The project will establish the first major windfarm in Namibia with a capacity of up to 40 MW and is located 30 km North of Rosh Pinah. This major windfarm provides a valuable learning experience for NamPower. It is supporting the ambitious targets of NamPower to increase the supply of renewable energy and to improve the energy independence of Namibia. In addition, the project contributes to Namibia’s aspirations becoming a hub for the production of green hydrogen.
The funding of the 161 million Euro (roughly 2.7 billion NAD) is provided by the German government and forwarded to KfW Development Bank for implementation. The three projects will directly contribute to the achievement of HPP II and the updated NDC helping to kick-start growth after the severe impact of COVID-19 Crisis.
Ambassador Beck said: “I am confident that the agreed areas of our bilateral financial cooperation will make a real difference to the people of Namibia, as they will contribute directly to the implementation of the Harambee Prosperity Plan, the government‘s economic recovery and development plan.”
The enduring bilateral development cooperation is a central component of the special relations between Namibia and Germany and a continuous support to the Namibian Government. In 30 years of Namibia’s independence, Germany has always assisted in strengthening the country’s social and economic growth. To date, German development cooperation with Namibia amounts to 1.6 billion Euros (roughly 26.8 billion NAD).
Minister Shiimi said: “Namibia is very grateful for the continued support from the Federal Republic of Germany. The agreed financial support is for strategic investments in critical areas that will help the economy to recover and it will come in handy to help us build back better.”