The Government Institutions Pension Fund (GIPF) is set to launch an infrastructure fund with a minimum funding capacity for projects worth N$100 million.
This is an increase from the initial GIPF infrastructure fund launched in 2016, which had a minimum investment threshold of N$56 million.
GIPF’s Manager of Alternative Investments, Sara Mezui Engo, told the Windhoek Observer in an interview that she expects the fund to be ‘up and running’ before August this year.
“These have to be bankable projects because we are a pension fund, we prefer to take up debt, but we do recognise that there are good projects in the infrastructure sector where the construction risk is much less and there we have some appetite to take up equity in the infrastructure projects.
“These funds will in all likelihood, be a minimum of 15 years and that goes with the duration of what a pension fund can stomach. The nature of our liabilities is long-term,” Mezui Engo said.
The announcement by the GIPF comes as Eos Capital announced last week that it will launch an infrastructure fund called the Infrastructure Development and Investment Company Namibia, which will fund attractive Namibian projects.
Eos said the fund will provide long-term financing for projects through equity or quasi-equity investments.
Eos Chief Investment Officer, Ekkehard Friedrich, said in an interview that the details of the fund, which will have a war chest of between N$500 million and N$1 billion, will be issued soon.
Development Bank of Namibia (DBN) CEO, Martin Inkumbi, told the Windhoek Observer that the bank was coordinating with the Ministry of Finance to launch its infrastructure fund, but said no date on the launch had been decided yet.
He said modalities on the implementation of the N$2.5 billion Infrastructure Fund, which is initially set to launch in October last year, were still being discussed hence the delay to launch the project.
“We have been coordinating with the ministry of finance, at the moment there are certain aspects that need to be discussed and agreed.”
In October last year, Nimbus Infrastructure Limited listed on the Namibia Stock Exchange (NSX) via private placement.
The initial capital raising saw an excess of N$100 million raised from institutions and retail investors, for investment in ICT projects and institutions in sub-Saharan Africa.
In April this year, Standard Bank’s Head of Public Sector and Market Intelligence, Titus Ndove, estimated that N$41 billion in physical infrastructure funding is required for Namibia to achieve the key targets outlined in the National Development Plan 5.
Physical infrastructure could be defined as economic infrastructure such as ICT, transport, power or social infrastructure such as water, sanitation, school facilities and hospitals.
In 2016, President Hage Geinbob estimated that Namibia had invested about N$110 billion in South Africa in 2015 in the form of pension funds, long-term insurance and other investments.
In a move meant to address the outflow of capital, government introduced new regulations that asset managers invest an increased portion of their assets in Namibia.
Regulations on domestic asset requirements to lift the domestic asset thresholds from 35 to 45 percent will be concluded before the end of this year.