AfDB and Namibia sign ZAR 2.9 billion loan agreement for the construction of new Port of Walvis Bay Container Terminal
The African Development Bank Group (AfDB) and Namibia on Friday, November 8, 2013 signed a ZAR 2.9 billion (US $338 million) sovereign guaranteed loan to the Nambian Ports Authority (Namport) to finance the construction of the new container terminal at Port of Walvis Bay and a UA 1.0 million grant (US $1.5 million) to the Government of Namibia for logistics and capacity building complementing the port project loan. The project was approved by the AfDB Group in July 2013, the company said in its press release.
Namibia’s Finance Minister and Governor for the Bank, Sara Kuugongwelwa-Amadhila, signed the loan guarantee and grant agreement on behalf the Government in Windhoek. Namport CEO Bisey Uirab signed the loan agreement on behalf of Namport, while Ebrima Faal, Regional Director of the AfDB’s Southern Africa Resource Center (SARC), signed for the Bank.
In her intervention, Kuugongwelwa-Amadhila stressed the importance of the project and its contribution to one of the key development goals (the logistics pillar) of the National Development Plan which aims to position Namibia as a regional logistics hub by 2017. The Minister also thanked the AfDB for its support to the Republic of Namibia. “Our engagement with AfDB has benefited our country in many areas. Some of the projects undertaken with the assistance of the AfDB include roads and railway development projects as well as education infrastructure and capacity building.
As demonstrated by this project, cooperation with AfDB is not confined to sovereign borrowing, but can also address needs of State Owned Commercial Enterprises (SOEs) and the private sector. We encourage AfDB to continue to explore ways and means to mobilize resources to strengthen the Bank’s support to middle-income countries. I also encourage the Bank to explore ways to expand its activities in the private sector and SOEs sectors.”
For his part, the Namport CEO highlighted the importance of the project and expressed appreciation to the AfDB: “I wish to acknowledge the positive spirit and enthusiasm of the African Development Bank in engaging us for the financing of this project. The AfDB has been unwavering in its commitment to this project throughout the entire process… This terminal will triple our capacity leading to a direct improvement in throughput for this industry unleashing another $500 million [NAD] per year as value-added to our economy. This additional capacity will bring down the transport cost element of goods purchased in Namibia and our neighbouring countries. At present, the transport element represents some 14% of the total cost versus an international standard of only 5%.”
In his statement, Faal emphasized the developmental impact of the project: “This project is important for Namibia and for the Southern African Development Community (SADC) region. It is critical to fulfilling Namibia’s aspirations to become a world-class logistics hub in the SADC region,” he said.
According to Faal, the project will enhance international and inter-regional trade and regional integration and Namibia will be able to fully exploit its unique geographical location to facilitate trade to and from the region.
“With the high levels of youth unemployment, the Bank’s support to Namport and the Government of Namibia will greatly improve private sector development and youth employment and will especially boost women participation in the logistics sector,” he emphasized.
The project is expected to enable Namport to triple the container-handling capacity at the Port of Walvis Bay from 350,000 TEUs to 1,050,000 TEUs per annum. It will also finance the purchase of up-to-date port equipment and the training of pilots and operators for the new terminal. The grant component will fund the preparation of the National Logistics Master Plan study, technical support and capacity-building for the Walvis Bay Corridor Group and training of freight forwarders with particular emphasis on female staff.
According to the AfDB Director of Transport and ICT, Amadou Oumarou: “Through this project which potentially serves up to seven major economies in the SADC region, the Bank is assisting in the diversification and distribution of port facilities on the southwest coast of Africa, and provides the much-needed alternative for the region’s landlocked countries.”
The project will stimulate the development and upgrade of multimodal transport corridors linking the port to the hinterland while improving the country’s transport and logistics chains. It will also boost competition among the ports and transport corridors in the region with the ripple effect on reductions in transportation costs and increased economic growth.
The projected project outcomes include improvement in port efficiency and increase in cargo volumes by 70% in 2020 as a result of increased trade in the region. The benefits of the project will include among others, the stimulation of inter-regional trade and regional integration, private sector development, skills transfer and most importantly employment creation, leading to significant economic development and poverty reduction in Namibia, and the SADC region.