The Development Bank of Namibia (DBN) has released its annual results for the 2015 / 16 period.
The Bank amended its reporting period from the end of the calendar year to the end of March 2016 to coincide with the financial year of its shareholder, the government. The annual report for 2015 / 16 covers a 15-month period. Standard 12-month reporting will be resumed in 2017 reporting.
During the period DBN loans and advances grew to N$3.8 billion as at 31 March 2016, up from N$2.3 billion in 2014. The growth is primarily attributable to the increased scope and larger amounts approved per project.
Over the same period, net interest income grew from N$215.56 million in 2014 to N$339.78 million. Net income grew from N$147.25 million to N$208.76 million. The Bank reapplies the majority of its net income to lending in the interests of development.
For the period under review, the Bank maintained the quality of its loan and investment portfolio with bad debts of 4.1 percent, which is below the maximum budget percentage of 5.0 percent. This falls approximately 30 percent below the recommended level of bad debt of 6 percent advocated by the Association of African Development Finance Institutions (AADFI).
The Bank’s assets grew to N$4.59 billion as at 31 March 2016, up from N$2.92 billion at the end of 2014, an increase of 57.2 percent on the back of the high loan book growth.
During the period, the Bank in consultation with the shareholder, revised its lending and investment focus and ceased providing direct finance for small and medium enterprises to focus on the provision of finance for infrastructure and to enterprises with an annual turnover of above N$10 million, as well as business projects valued at more than N$10 million.
CEO Martin Inkumbi said that the shift in strategic focus was prompted primarily by the mandate of the SME Bank to provide finance to smaller enterprises. In addition, the shift is supported by a growing finance ecosystem of commercial lending activities and specialist private funds that finance SMEs. The benefit to the Bank, Inkumbi said, is that it can evolve into its new role as an impactful and effective financing agency for larger initiatives.
He added that the Bank has put in place a sound risk management system which envisages the requirements for preservation and sound management of its own pool of capital, as well as capital entrusted to it by the shareholder, private sector sources and external agencies.
In terms of organisational development, Inkumbi said the Bank is establishing an in-house treasury function to support its capital raising efforts and liquidity management. A post investment and loan monitoring function was created as part of DBN's credit risk management function to ensure appropriate utilisation of the Bank’s funds and to support ongoing risk management of enterprises and projects that the Bank has invested in.
Inkumbi concluded by noting that the Bank put in place an environmental and social management system, known as the ESMS, to mitigate harmful impacts that could emanate from the projects and business activities of enterprises it is financing. An environmental risk manager was appointed to oversee the function.
Solar power for the Otjozondjupa Region. The Development Bank of Namibia has followed up on the success of the Omburu Solar Park by providing finance for the 4.5 MW photovoltaic power plant near Okahandja.
Renewable energy finance powers Namibian energy sector
Development Bank of Namibia finance for Osona photovoltaic plant
The Development Bank of Namibia (DBN) has announced that it has provided finance for another solar power generating facility, Osona Sun Energy, located near Okahandja. The plant, nearing completion, has a capacity of 4.5 MW.
The plant, which will operate in terms of a power purchase agreement (PPA) with NamPower, was developed by InnoSun. InnoSun, founded and headed by father and son team Grégoire and Thomas Verhaege, also constructed the Omburu photovoltaic park. Osona Sun Energy is owned by a consortium of investors comprised of InnoSun and Black Diamond Investments, a local BEE group that holds a 30 percent share in the company.
DBN Head of Lending, John Mbango, said that InnoSun and Black Diamond Investments have proven to be skilled and trustworthy partners for finance. The Bank, he says, closely considers the track record of all applicants. The fact that the establishment of the Omburu photovoltaic plant proceeded smoothly has given the Bank full confidence in InnoSun’s operational capacity.
Mbango also said that he was pleased that the partners chose DBN as the vehicle for finance.
According to Mbango, the Bank welcomes additional applications from enterprises that have used DBN finance to good effect. This open door policy encourages reinvestment of profits in related or other areas by enterprises that have proven their ability to prosper and contribute to Namibia's economic growth.
Talking about solar energy in Namibia, Mbango said that on the basis of the photovoltaic projects, the Bank has developed a strong body of knowledge on the business model and technology and skills required for a solar park. He added that the Bank will welcome applications from other projects in the same field, as well as other renewables, subject to demand and feasibility of PPAs with NamPower.
Mbango said that privately owned utilities are an emerging trend in provision of services, along with public private partnerships. He concluded that DBN will consider enterprise finance applications of this nature, but that these have to be accompanied by firm commitments from SOEs and / or local authorities acquiring the services of utilities.
The Development Bank of Namibia (DBN) recently donated N$50,000 towards construction of a school hall for Romanus Kamunoko Secondary School in Rundu. The school currently has to rent larger premises when its learners are required to sit for exams.
Talking at the handover, DBN CEO Martin Inkumbi said that he and many of his colleagues attended schools with limited facilities. However with determination to learn, they were able to rise to the challenge of learning, and improve their prospects in life.
Addressing the learners, Inkumbi said that the outcome of diligent study would lead to a higher quality of life in adulthood. He told the learners that although they should set aside some time for relaxation, they should place a high degree of emphasis on their studies.
He added that learning was a partnership between the parent, the teacher and the learner, and that all three should be actively engaged in the education of the learner. He said that parents and carers should take an active interest in the progress of learners, and endeavour to assist if learners fell behind.
Inkumbi concluded by saying that he hoped that some of the learners would join the Bank as valued, knowledgeable employees.
In addition to finance provided for private tertiary, secondary and primary educational facilities, the Bank provides support for public sector schools through its social responsibility programmes, including assistance with upgrading of hostel facilities for one school, and support to a school damaged in flooding in the north.