The Development Bank of Namibia’s debut N$2,5 billion, Medium Term Note Programme on the Namibia Stock Exchange (NSX) will not be used for the Infrastructure Fund, which will also be housed by DBN, Chief Executive Officer, Martin Inkumbi, said this week.
Finance Minister, Calle Schlettwein, announced in September that the Infrastructure Fund will be ring-fenced for funding current and future priority economic infrastructure.
Inkumbi explained this week that the Infrastructure Fund will be a separate capital raising programme specifically for public infrastructure.
He previously told the Windhoek Observer that proceeds from the N$2,5 billion Medium Term Note Programme issue, which initially raised close to N$300 million last month, will be used mainly to shore up the bank’s liquidity.
The Infrastructure Fund is expected to be operational by the end of October this year and it will draw capitalisation from the domestic financial and capital markets, with amortisation provided for under the budget overtime as a measure to embed sustainability and fiscal transparency.
Schlettwein said the proposed fund will complement the infrastructure financing provided through the African Development Bank and Private Public Partnerships infrastructure financing arrangements.
“These measures will be a good shot in the arm for the construction sector, which is now bottoming out of the severe effects of the steep consolidation phase,” he said.
According to Bank of Namibia estimates, Namibia has a funding gap of over N$150 billion for upgrading aging infrastructure including railway, roads and airports. Major projects proposed for development by the Government include road projects and railway projects, which also include commuter trains in Windhoek and surrounding areas.
Airport projects include those at Hosea Kutako International Airport. The port at Walvis Bay is also being expanded and money is also needed for electricity generation projects.