Africa-Press – Namibia.
Minister of Finance, Ericah Shafudah, signed a N$1.5 billion loan agreement on Tuesday with the German government through the Kreditanstalt für Wiederaufbau (KfW) to fund Namibia’s second Water Sector Programme.
The loan carries an interest rate of 10.09% and has a 20-year repayment period, including a five-year grace period.
“This interest rate is 2.3% lower than the local interest rate of similar maturity, and provides sufficient grace period to allow the construction of these projects, before repayment,” she said.
Shafudah said Namibia is currently experiencing water scarcity and a dry climate due to unpredictable and low rainfall, which poses significant challenges to water delivery. The situation is further exacerbated by recurrent droughts, which threaten water supply.
“The government has thus declared water scarcity a national emergency and is giving high priority to the water sector. It has also been identified that water infrastructure has for a long time been plagued by underinvestment in the sector, and most of the water infrastructure has aged and is beyond its useable lifespan,” said the minister.
The minister noted that the loan agreement falls under the category of projects financed outside the national budget and will be implemented over the Medium-Term Expenditure Framework period.
The projects will be executed by NamWater under the Water Sector Support Programme II.
The loan will fund, among other things, the upgrade and extension of NamWater’s bulk water infrastructure at Katima Mulilo, the drilling of production boreholes, the development of wellfields and the construction of approximately 130km of new water pipelines along the Omundaungilo–Omutsegwonime route.
The loan will further support small-scale desalination plants to be deployed on existing ministerial boreholes and shallow hand-dug wells, aiming to rapidly improve access to potable water by enhancing the quality of saline groundwater in affected communities.
“It is our hope that the implementation of these projects, made possible by this generous financing arrangement, will significantly improve water accessibility for our people, thereby contributing meaningfully to our national development agenda,” said Shafudah.
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