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Winner of the Development Bank of Namibia (DBN) 2019 Innovation Award, Pulsar Electronic Solutions proposed a smart metering platform to enable household and enterprise electricity users to control their electricity usage remotely using mobile devices. Although the Bank is actively engaged in financing additional generation and transmission capacity, it also recognises that streamlining and economizing electricity usage is an important factor in energy sustainability for Namibia.

Deputy Director and Economic Adviser to the Minister of Finance, Penda Ithindi, presented the Award, together with Chairperson of the DBN Board, Tania Hangula.
 
Talking about the Award, DBN CEO Martin Inkumbi said the Bank’s experience is that innovation is not an instant, overnight phenomenon, but an exacting process of enterprise maturation to the point of bankability.
 
He added that Pulsar Electronic Solutions has earned the support of the Bank in the journey ahead and pledged support from the Bank to place the project on the path to enterprise success.
 
First runner-up in the Innovation Award, NamOceanic Kelp Production, proposed the manufacture of chicken feed from kelp. Chicken, is one of Namibia’s staples, and feed is currently imported. Second runner-up Primebiochar proposed a soil supplement manufactured from biomass obtained in bush clearing. The supplement will assist in retaining water in the soil and improve nutrient value of the soil for horticulture.
 
Winner of the Good Business Awards large enterprise category, Wordpress prints newspapers and supplements, previously printed in South Africa and elsewhere. Among its goals, the Development Bank of Namibia provides finance for local manufacturers, with the aim of reducing imports from across the border.
 
Runner-up in the large enterprise category, Ombepo Energy constructed and operate Namibia’s first wind farm near Lüderitz in the //Karas Region. Ombepo Energy is a venture between InnoSun Energy Holdings and Lüderitz Town Council. DBN has prioritized energy and electricity, and has developed a strong track record in the field of renewable energy.
 
Winner of the Development Bank of Namibia 2019 Good Business Awards SME category, Ian Shuttle, provides transport services for other companies, shuttle services for hotels and chauffeur services. It employs more than 50 people. The Bank has identified SMEs as important sources of employment creation.
 
First runner-up in SME category, Blue Box Technology is owned by young entrepreneurs, provides digital retail media, event management and coin operated cellphone charging kiosks with secure lockers. The Bank has identified youth entrepreneurship as the breeding ground and basis for the future of Namibia’s economy. Second runner-up, Miiyelo Investment, provides automotive retail services in Otjiwarongo, focusing on sale of tyres, wheel balancing, tow-in services and it operates a car wash.
 
Talking about the nature of the Good Business Awards, DBN Chairperson Tania Hangula said the Bank’s main objective is to support economic and social development. It aims to achieve this goal through the provision of finance and business support to Namibian enterprises.
 
Long-term business sustainability, she noted, is important to ensure sustainable economic growth and social progress. Winners of the Bank's large enterprise and SME awards represent this goal.
 
Through the Good Business and Innovation Awards, the Bank demonstrates commitment to support Namibian businesses who have demonstrated resilience and a winning attitude, Hangula added.
 
Economic Adviser to the Minister of Finance, Penda Ithindi, said the Bank is a key agency in developing Namibia, and announced that the Bank has supported the creation of 24,000 new jobs and 32,000 temporary jobs since 2004 while approving over N$15 billion development finance for infrastructure and enterprise activities over the 15 years of its existence.

In pictures

Presenting the Awards, are Economic Adviser to the Minister of Finance, Penda Ithindi and Chairperson of the DBN Board, Tania Hangula, as DBN CEO Martin Inkumbi looks on.
 
 
Winner of the Development Bank of Namibia 2019 Good Business Awards large enterprise category, Wordpress. The company prints newspapers and supplements, previously printed in South Africa and elsewhere. Among its goals, the Development Bank of Namibia provides finance for local manufacturers, with the aim of reducing imports from across the border.
 
Runner-up in the Development Bank of Namibia 2019 Good Business Awards large enterprise category, Ombepo Energy. Ombepo Energy constructed and operates Namibia’s first wind farm near Lüderitz in the //Karas Region. Ombepo Energy is a venture between InnoSun Energy Holdings and Lüderitz Town Council.
 
Winner of the Development 2019 Good Business Awards SME category, Ian Shuttle. The company provides transport services for other companies, shuttle services for hotels and chauffeur services. It employs more than 50 people.
 
 
First runner-up in the 2019 Good Business Awards SME category, Blue Box Technology. The innovative company, owned by young entrepreneurs, provides digital retail media, event management and coin operated cellphone charging kiosks with secure lockers.
 
Second runner-up in the 2019 Good Business Awards SME category, Miiyelo Investment. Miiyelo provides automotive retail services in Otjiwarongo, focusing on sale of tyres, wheel balancing, tow-in services and it operates a car wash.
 
Winner of the 2019 Innovation Award, Pulsar Electronic Solutions proposed a smart metering platform to enable household and enterprise electricity users to control their electricity usage remotely using mobile devices. Although the Bank is actively engaged in financing additional generation and transmission capacity, it also recognises that streamlining and economizing electricity usage is an important factor in energy sustainability for Namibia.
 
First runner-up in the Development Bank of Namibia 2019 Innovation Award, NamOceanic Kelp Production, proposed the manufacture of chicken feed from kelp. Chicken, is one of Namibia’s staples, and feed is currently imported. 
 
Second runner-up in the 2019 Innovation Award, Primebiochar proposed a soil supplement manufactured from biomass obtained in bush clearing. The supplement will assist in retaining water in the soil and improve nutrient value of the soil for horticulture.
 

Massive development impact. At the 2019 Development Bank of Namibia Good Business and Innovation Awards, Economic Adviser to the Minister of Finance, Penda Ithindi, said the Bank is a key agency in developing Namibia, and announced that the Bank has supported the creation of 24,000 new jobs and 32,000 temporary jobs since 2004 while approving over N$15 billion development finance for infrastructure and enterprise activities over the 15 years of its existence.
 
Innovation needs support and patience. Speaking at the 2019 Good Business Awards and Innovation Award, DBN CEO Martin Inkumbi said the Bank’s experience is that innovation is not an instant, overnight phenomenon, but an exacting process of enterprise maturation to the point of bankability.

Development Bank of Namibia looks to the future

The Development Bank of Namibia (DBN) recently celebrated its 15th anniversary. Opened in 2004, the Bank has since contributed to a wide range of economic activities and socio-economic wellbeing through its finance. 
At its opening in 2004, DBN had a single employee, Founding Chief Executive Officer (CEO) David Nuuyoma, and operated from a single office equipped with a fax machine. At the end of its 2004 financial year, the Bank had assets of N$138 million and a staff complement of 16. Fifteen years on, at the end of its 2019 financial year, its assets amount to N$9.7 billion and it has a staff complement of 105.
 
Talking about the Bank’s asset growth, current CEO Martin Inkumbi says the Bank was capitalised by its shareholder the Ministry of Finance, but that its primary source of growth has been its ability to attract further capital on the back of government’s equity capital contribution. Prior to opening, he says, the Bank adopted a commercial model in terms of which repayment of loans – with interest – is primarily reallocated to additional lending, with a portion set aside for prudent reserves. In addition to subsequent tranches from its shareholder, the commercial approach to lending has had a significant multiplier effect on the Bank’s ability to finance additional projects.
 
Explaining the importance of a strong asset base, Inkumbi says the amount is composed primarily of loans. Loans to the value of N$8.8 billion have currently been disbursed.

Forms of finance

However, Inkumbi says that the Bank’s impact on economic activity extends beyond lending and it has had a catalytic effect on forms of finance.
 
To illustrate the point, he says that the Bank has introduced new sectoral models for finance. In this regard, he says that the Bank pioneered contract-based finance to enable contractors to undertake projects for which they would not have previously had operating capital or assets. This he says has made the contracting subsector more inclusive.
 
He points to finance for renewable energy as another feather in DBN’s cap. In order to enable privately owned renewable energy utilities to participate in electricity generation, regulatory change had to be paired with a suitable financing model. In addition to photovoltaic plants, the Bank also provided finance for the Ombepo wind farm, another first in Namibia.
 
Finally, he highlights the Bank’s apex finance which provides capital to on-lenders. Although the Bank is noted for providing capital to two local commercial banks and the Namibia Procurement Fund in the past for SME finance, what is less well known is that the Bank provides apex microfinance for entities which on-lend small amounts for business activities with beneficial development impacts. He points to the Banks capital provision to boost Postfin, the lending arm of Nampost Savings Bank.

Approaches to finance

Inkumbi goes on to say that the Bank has not only provided new forms of finance but has also implemented new approaches to finance.
 
The Bank, he says, has taken the lead in providing mentoring for SMEs. This has the effect of reducing risk inherent in financing start-up SMEs and makes the enterprises more sustainable.
 
He goes on to say that the Bank was also the first financial enterprise to implement an environmental and social management (ESM) system. The ESM Unit monitors all projects financed by the Bank for compliance with local environmental, labour and social legislation and regulations. The ESM Unit also vets applications to ensure that potential lending will not have negative environmental and / or social impacts.

Confidence in the Bank

Inkumbi states that DBN has earned and maintains a high level of confidence. This is attributable to its advanced risk management and robust governance. Risk management, he says, enables the Bank to assess risks in advance and manage them if they are seen to materialise. This is in keeping with the requirement for the Bank to provide finance for projects with a higher risk than would be acceptable to commercial sources of finance.
 
Inkumbi emphasises that DBN is not in competition with commercial banks, but complements them in the financing landscape and may provide them with opportunities to participate in development activities by acting as a proxy for direct finance, using lines of credit from commercial banks to finance projects which do not fit with their mandates, as well as absorbing and managing the associated risks.
 
He says that DBN also manages funds advanced for Namibian development by multinational development finance institutions such as the African Development Bank (AfDB) and the German Development Bank, the Kreditanstalt für Wiederaufbau (KfW).
Inkumbi points out that the Bank takes pride in the confidence of subscribers to its Bond Programme which is listed on the NSX. He says the Bank is currently servicing N$700 million in bonds, and negotiations are underway with other investors who are seeking to subscribe to approximately N$400 million in additional bonds.
 
Although Fitch recently downgraded DBN to level of its shareholder, the ratings agency maintained the local rating category of AA, in a sign that it believes the Bank is able to service the bonds that it issues and is investment grade.
Plans and new developments
 
On the Bank’s future, Inkumbi says DBN adapts to the needs of the economic environment to develop products and operations that stimulate economic activity. The Bank will continue to evolve and learn.
Currently, the Bank is developing a facility for youth artisans which will address the widespread need for vocational skills to further industrialisation. When implemented, the youth artisan facility is envisaged to have a robust mentoring and training component to ensure that the enterprises are sustainable.
 
He also says that the Bank is developing a credit guarantee scheme which will be made available to commercial sources of finance, such as banks, to reduce the risk of financing SMEs with sound business plans and cash flow projections, but with lower levels of collateral. The assurance scheme will enable banks to finance a greater number of SMEs.

Excellence is basis for success

Inkumbi stresses that the Bank’s financial capacity is secondary to the level of excellence that it instils in its staff. Although DBN has significant financing capacity in its own reserves, and the confidence of external sources of finance, its ability to effectively deploy its finance with successful results is its most important characteristic and this is dependent on its human capital.
 
In order to maintain and develop its degree of excellence, the Bank has shaped itself as a learning organisation. In addition to observing and evolving to the needs of the economy, its human capital is engaged in a continuous process of professional development, individually and as functions within the Bank.
 
The result is a streamlined machine that not only serves the mandate of DBN, but also serves Namibia. As proof of this, Inkumbi offers the fact that although the Bank has a very high staff retention ratio, individuals who leave the Bank do so to enter senior leadership positions in the financial sector and Government.
 
In conclusion, Inkumbi foresees that the Bank will continue to rise to challenges with excellence and innovation in the coming years and make a significant contribution to growing maturity in the Namibian economy.
 

Development Bank backs privately owned solar for enterprise

Solar a critical need for industrialisation

Development Privately owned solar generation is a significant force for the future of Namibian enterprises, says Development Bank of Namibia Head of Marketing and Corporate Communication, Jerome Mutumba.

 

There is a current moratorium on implementation of new solar photovoltaic feeds into the national electricity grid, but solar photovoltaic plants can still lend impetus to Namibia’s drive for industrialisation.

 

To explain this, Mutumba notes that the majority of Namibia’s electricity supply is imported, and that this limits confidence of investors. Mutumba cites a report by Musa Carter in The Economist newspaper of 25 October 2017, which states that a group of unidentified investors decided against establishing manufacturing facilities in Namibia due to concerns over electricity.

 

Mutumba goes on to say that although we have various national development programmes and policies that give impetus to the country’ aspirations, if the critical component of electricity to power industrial processes is not available, or is priced too high, economic development predicated on industrialisation will experience a sluggish ascent.

 

Mutumba acknowledges that electricity tariffs need to be marked up to support development of generation capacity and infrastructure, with a view to long-term reductions in imports of electricity, but this also has to be balanced with the needs of industrialisation, which not only will address current needs of economic development, but also the needs of future generations.

 

The differences in tariffs across the regions obviously make countries which offer lower electricity costs and greater local generation capacity far more attractive to industrialists. If Namibia is to compete, a model has to be provided which is cost efficient for industrialists and gives them security of supply.

 

Mutumba advances a model in which enterprises can own their own distribution capacity in the form of renewables, particularly solar. To illustrate the model, he uses DBN-financed solar power facility Sun EQ, which provides electricity to Ohorongo Cement. The Sun EQ facility, he says, secures the supply of electricity under an offtake agreement with Ohorongo, and also gives both entities the ability to agree on rates that make Ohorongo sustainable.

 

In term of financing, Mutumba says that a facility of this nature may be financed over a period of 10 or more years, out of an estimated lifespan of up to 30 years. Although the repayment is required for the period of 10 or more years, this can be recovered from sales of electricity during that period, subsequent to which the cost of generation falls substantially, and the gains can be used either for growth or in anticipation of future replacement.

 

This model, he says, should be advanced to industrialists as a solution to Namibia’s power deficit. In terms of the model the industrialist not only profits and grows as a result of core business, but can also profit and grow from the subsidiary business of supply of electricity for operational needs.

 

Talking about scale, Mutumba says, the Bank is open to discussion about the scale of the plant. He suggests that if scale is a concern to a single enterprise, neighbouring enterprises may consider forming consortiums.

 

Although this may seem unusual, this model can already be seen in shopping centres where electricity is supplied to a spread of tenants from solar installations on roofs. There is no reason why, given a bit of thought and ingenuity, it should not be applied to industrial parks office parks and housing developments, Mutumba concludes.