The Namibian government has signed a loan agreement worth approximately N$1.5 billion with the German Development Bank, KfW, to fund major water infrastructure projects in the country’s northern regions.
The loan, facilitated through the Ministry of Finance, will be used to support critical projects aimed at improving water infrastructure and addressing long-standing water challenges in the northern regions of Namibia.
The projects will be implemented by NamWater on behalf of the government.
Finance Minister Erica Shafudah described the funding as both urgent and strategic, particularly for communities in the north.
“This funding is earmarked for the construction, rehabilitation, and upgrading of extensive bulk water infrastructure and investment of strategic importance that will directly address the long-standing water supply challenges faced by our communities,” Shafudah said.
She highlighted that the loan carries a 10.09% interest rate and a 20-year repayment period, including a five-year grace period.
The interest rate is 2.3% lower than the local rate for loans of similar maturity.
“That is very, very critical – 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 added.
Projects to be financed under the agreement include the Omundaungilo–Omutsegwonime Bulk Pipeline Scheme (Phases 1 and 2), the Oshakati–Ondangwa–Oshali–Omuthiya–Omutsegwonime Pipeline Replacement (Phases 1 and 2), the Katima Mulilo Extension Phase 2, and the installation of package plants, including desalination units.
German Ambassador Thorsten Hutter welcomed the agreement, describing it as a significant step in Namibia’s efforts to boost water resilience.
“The projects to be financed will help support Namibia’s resilience to droughts by helping to reduce water losses and increase a long-term sustainable water supply for the country,” Hutter said and reaffirmed Germany’s commitment to ongoing cooperation on water development projects.
NamWater CEO Abraham Nehemia said the agreement would boost the utility’s capacity to deliver reliable services.
“This partnership with the Government of the Republic of Namibia and the Government of the Federal Republic of Germany through KfW strengthens NamWater’s capacity to deliver reliable and sustainable water services to all Namibians,” Nehemia said.
“The support will enable us to accelerate the development and rehabilitation of vital infrastructure that is critical to meeting current needs and securing future supply.”
