The amount according to RFA Chief Executive Officer Ali Ipinge will be channelled towards the initial 15 kilometres of the road works.
“The whole amount will be used for the road rehabilitation and upgrade which we expect to cost up to $350 million. The balance will be used for the second phase of the project,” he told the Windhoek Observer.
He said RFA had only committed towards funding the initial phase of the project.
“We were looking at the initial phase and considering the costs involved government was meant to fund the rest. We might have to look into it considering the current projects that government has to undertake,” Ipinge said.
Finance Minister Calle Schlettwein said the government guarantee had enabled the RFA to enter into the financial cooperation agreement, which will be under the programme, The Sector Wide Approach Road Transport .
“Through this agreement the Road Fund Administration will receive the South African rand denominated loan of approximately N$447 million, which is fixed at 7.79% for a period of 10 years, this I must note is below the domestic rate,” the Minister said.
The upgrade will see the introduction of a dual carriageway to boast the current road network between the capital and Okahandja.
Through the agreement, the RFA and the Roads Authority will receive a grant of N$ 15 million to help the two organisations facilitate the operation and improve the automation of revenue received through various channels to generate revenue to repay the loan.
This is the first ever agreement to see Kfw allow a local denominated loan to Namibia and will have a grace period three years before the RFA starts to make its repayments.