Windhoek-The Development Bank of Namibia (DBN) and the Development Bank of Southern Africa (DBSA) have concluded a Memorandum of Understanding (MoU) that has potential far-reaching implications for development finance in Namibia.
In terms of the MoU, the two banks will establish the means to cooperate on and co-finance projects that are of mutual interest to both parties.
According to DBN CEO Martin Inkumbi, the agreement will give both parties the ability to contribute to regional development and prosperity through opportunities in Namibia.
Although DBN’s mandate precludes it from providing finance for projects outside Namibia, DBSA and DBN can jointly foster Namibian projects that will have a beneficial impact on Southern Africa, Inkumbi says.
The DBN is seeking avenues to promote regional trade, regional integration, as well as developing robust Namibian infrastructure to support the regional transport and logistics sector.
He adds that cooperation among SADC Development Finance Institutions (DFIs) is encouraged by the SADC-DFI Network, of which both the DBN and the DBSA are members, as a means of coordinating and supporting regional economic development and integration.
Asked about cross-border capital flows, Inkumbi said both institutions are in the Common Monetary Area and there are thus no restrictions on capital flows.
In addition to potential co-financing of projects of mutual interest, the MoU has, at its core, sharing of information and capacity building.
Among the elements of the MoU, DBSA will make available to DBN expertise from its international finance team, as well as product and sector expertise in the fields of energy, transport and water.
DBSA may also make available knowledge and implementation skills for bankable projects, as well as assist in project preparation. DBN has established its own Project Preparation Fund to improve loan applications it considers of vital importance for Namibian development.
Inkumbi says the experience of DBSA in project preparation will be valuable to the DBN.
Talking about the broader ramifications of the agreement, Inkumbi said the prosperity of nations and regional stability is best built on cooperative economics and that the SADC Development Finance Network is of benefit to all.