Namibia: Water Dominates PPP Projects

MINISTER of finance Iipumbu Shiimi last week announced the state and the private sector are set to collaborate on three water projects, a student village and a solar power plant.

The five projects were selected from 40 concepts public entities presented to public-private partnership (PPP) units as the need for collaboration increases.

Shiimi made this announcement at the sixth annual PPP conference in Windhoek, while calling on the private sector and state organs to come up with strategies and financing avenues for the successful implementation of Namibia's PPP programme.

PPP programmes are cooperative arrangements between the public and private sectors, typically of a long-term nature, which involve the government and businesses working together to complete projects or provide services to the nation.

The selected projects include the wastewater direct reclamation plant for the City of Windhoek, the Otjiwarongo wastewater treatment works project for the Otjiwarongo municipality, as well as the desalination water supply project for NamWater.

The remaining two projects are the concentrated solar power plant for NamPower, and the development of a student village for the Ministry of Higher Education, Innovation and Training.

A consulting team developed a PPP Project Screening Framework (PSF) and guidelines on project appraisals to facilitate the process of identifying and screening potential PPP projects.

To date, 15 projects were screened using the PSF, and the five top-ranked projects were prioritised for launching as part of the country's project pipeline during the conference.

The International Monetary Fund recently said given the limited availability of public funds, African countries and development partners could consider reallocating some resources used for public investment towards financing public incentives for private projects.

When this reallocation is gradual and supported by sound institutions, transparency and governance, it could increase the amount, range, and quality of services for people in Africa, the fund said.

More innovative thinking would help realise the transformative potential of infrastructure on the continent.

According to Shiimi, the objective is to present the projects to the doorsteps of the private sector, at home and abroad, and build investor confidence by generating private developers' interest in the local market.

The water projects are aligned to the national development goals and are deemed to be of high socio-economic impact, while at the same time yielding returns for the private sector on their investment.

Shiimi is calling for stakeholders to present the best strategies and financing avenues for the successful implementation of Namibia's PPP programme.

Most of these projects require preparation funds.

The demand for a Project Preparation Facility (PPF) remains strong, with the Development Bank sitting on a project pipeline amounting to a total cost of around N$4 billion.

Shiimi said the establishment of a PPF in collaboration with the Development Bank of Namibia to support the development of bankable PPP projects is on its way.

In this respect, the government has committed N$100 million over the next three years to fund project preparatory work, such as feasibility studies for identified projects to feed the PPP cycle for implementation.

Given the funding gap of around N$30 billion, viable and commercially implementable projects can now be shifted to the private sector to give the central government fiscal space and contain the ballooning deficit.

Kenya, South Africa, Europe and even India have successful stories of the state and private sector collaborating on projects that today still yield benefits for both parties.

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