Nam guarantees AfDB ports loan

 

 Windhoek ‑ The Namibian government is providing a sovereign guarantee to back a R3.3 billion loan from the African Development Bank (AfDB) extended to Namibia Ports Authority for container terminal expansion and building technical capacity, Finance Minister Saara Kuugongelwa-Amadhila has said.

“Government has agreed to provide a sovereign guarantee to support the loan from the AfDB for Walvis Bay container terminal expansion,” Kuugongelwa-Amadhila said at the signing of the loan deal with AfDB officials.

The loan will be repaid over a period of 15 years, with a five-year grace period, Kuugongelwa-Amadhila said.

“This effectively means a 20-year repayment period with a floating interest rate,” she said.

The guarantee the government has provided to Namport’s AfDB loan should open the way to state-owned enterprises of a commercial nature to seek to raise own financing, as opposed to relying on budgetary support from the treasury.

“State-owned enterprises with commercial operations should take the initiative to raise own funds. We can help them by providing sovereign guarantees to give confidence to lenders regarding the security of the loan. This would also help to lessen the costs of borrowing.

“Parastatals should not shy away from issuing their own security paper to raise funding or to seek credit ratings, which will improve their chances of raising capital,” Minister Kuugongelwa-Amadhila said.

Namport sealed a R3.38 billion loan agreement with AfDB to finance expansion of port container handling terminal to one million 20-foot equivalent unit (TEU) from 355 000 TEU per year.

A small portion of the loan will finance a logistical master plan and capacity-building initiative aimed at positioning the harbour as the logistical hub of landlocked countries in the 14-member Southern African economic and trading bloc.

“At R3.38 billion, this investment in infrastructure represents the faith that our government has in Namport, Namibia and its role as a logistics hub,” Namport chief executive Bisey Uirab said at the signing ceremony for the loan agreement.

The Walvis Bay port expansion will cost R3.8 billion and Namport will finance the remaining R420 million, Uirab said.

Namport simultaneously signed a R3.8 billion equipment, procurement and construction (EPC) contract with China Harbour Engineering Company.

China Harbour Engineering Company, won the tender from a selection of seven bidders, Namport says.

Port container terminal expansion is expected to start before the end of the year and will be completed around 2017, Uirab said.

“China Harbour is committed to implement this project on time and construct it to its renowned global high standards,” Li Yi, China Harbour Engineering regional manager, southern Africa, said.

Li said that China Harbour has tremendous experience in ports construction and has over the past years established its reputation in Africa.

Namport wants the Walvis Bay Port, formerly a fishing harbour, to be the gateway and transport logistical hub for landlocked Botswana, Democratic Republic of Congo (DRC), Zambia and Zimbabwe.

Container handling capacity has expanded to current levels of 355 000 TEU a year from 20 000 containers a year in 2000, Namport says.

“The strategic location of Walvis Bay Port, offering the shortest shipping routes to Asian, European and American markets, makes it a natural gateway for Southern Africa countries,” Andrew Kanime, Namport deputy chairperson also said.

The expansion of the port facilities would also ensure that Namport “lives up to international port industry requirements”, Kanime said.

November 2013
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