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Namibia: Development Bank Plans Private Equity Fund
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Namibia Economist (Windhoek)
25 April 2008
Posted to the web 25 April 2008
Chamwe Kaira
Windhoek
The Development Bank of Namibia plans to set up a Private Equity Fund with one of the local financial services group, CEO David Nuyoma has disclosed to the Economist. "This has already been approved by the board and we are just waiting to sign a number of agreements," Nuyoma said this week in an exclusive interview.
He said the bank has opted to launch the fund with the unnamed financial services group to bring in skills required to manage the fund.
The fund is expected to be launched soon, Nuyoma added.
"There is so much to do in this country. That is why foreign investors come in and identify projects us Namibians don't think about," he said.
The Economist understands that it is likely that the development bank is setting up the fund to tap into an estimated N$5 billion of pension and life monies expected to flow into unlisted companies following the promulgation of the first changes to the Domestic Asset Requirements.
Pension funds and life insurance companies will now have to find suitable investments for 5% of their assets and aggregate liabilities, respectively, in unlisted companies.
In addition, the bank plans to introduce a programme to assist local authorities in developmental programmes. Nuyoma said a handbook for the authorities has already been published and is also expected to be launched soon.
Also planned for this year is an incentive for micro-support finance as part of the bank "pro poor stance". The bank has already recruited more staff this year to deal with the swelling projects it is involved in, Nuyoma said.
It had a partnership with Bank Windhoek that funded 43 Small and Medium Enterprises (SMEs) with about N$29 million between January and December 2007.
"This facility has now come to an end as the funding earmarked for it has been fully disbursed, which is an indication of the partnership's success," Nuyoma said.
On the issue of political interference, which has seen many state-owned companies getting involved in projects that are not economical, Nuyoma said the bank is selective regarding projects to participate in.
"I take that call religiously. We do say no to a lot of projects. And I think politicians understand," Nuyoma said. "But so far nobody has tried to bulldoze stuff through our throats."
He said the bank has funded new projects worth N$145.8 million between December last year and March this year. The projects are in the fields of energy, telecommunications, aviation, agro business, transport and construction.
Nuyoma said projects would create 219 new permanent and 665 temporary jobs, while retaining 2 103 jobs, thus having a positive impact on a total of 2 978 employment opportunities.
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Nujoma said the projects include a loan of N$40 million to Namibia Dairies, which plans to establish a super diary farm in Mariental District. The farm will house about 2000 free-range cows.
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