A EUR 4 million equivalent financing facility for infrastructure development in Namibia was signed with the Old Mutual Life Assurance Company (Namibia) Ltd, Old Mutual Namibia. Provided alongside the Old Mutual MIDINA (Managing Infrastructure Development in Namibia) Fund, the facility to Old Mutual Namibia will be used to cofinance infrastructure and related investment projects undertaken by local authorities, state-owned enterprises or private entities. The European Investment Bank (EIB) funds will be channelled to the final beneficiaries through Old Mutual Namibia, MIDINA Fund's promoter and main investor, and will cover up to 50% of eligible investments, while MIDINA itself will provide the balance of funding.
The facility will be managed alongside the MIDINA Fund by Old Mutual Asset Managers (Namibia) (Pty) Ltd (OMAM), the largest asset manager in Namibia. The rationale of the operation is to mobilise local and international resources to provide debt funding primarily for municipal and other infrastructure projects at appropriate maturities and competitive terms, while generating an acceptable return for investors. Eligible investment projects include transport infrastructure, telecommunications, power supply and distribution, water and sanitation projects, low cost housing as well as community projects in underdeveloped areas. The size of individual projects to be funded by the Old Mutual MIDINA Fund will be in the range of NAD 1 million to NAD 30 million.
The Bank's funding will be disbursed during a 5-year investment period and be reimbursed during a 10-year repayment period.
The loan agreement was signed by Mr. Louis du Toit, Chief Financial Officer of Old Mutual Namibia and Mr. Jean-Louis Biancarelli, EIB's Director General for Lending Operations outside the European Union. Old Mutual Namibia's Mr. du Toit said that the initiative will support the activities and objectives of the Old Mutual MIDINA Fund, thereby making a tangible contribution towards infrastructure development and employment creation in Namibia. Mr. Biancarelli commented that the MIDINA Fund is a very interesting new instrument for funding sustainable infrastructure projects, including in disadvantaged rural areas, which mobilises long-term investment funds for projects that make a contribution to poverty alleviation. It is thus fully in line with the Bank's Investment Facility mandate in the framework of the Cotonou Agreement.
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects that further the European Union (EU) policy objectives. EIB also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with it.
Financing in Africa, the Caribbean and the Pacific (ACP) is carried out under the provisions of the Investment Facility, set up by the ACP-EU Partnership Agreement, signed in Cotonou in June 2000. Under the Cotonou agreement the total financial aid available amounts to + EUR 15 billion for 2002-2006, of which EUR 11.3 billion is grant aid from the EU member states, + EUR 2 billion is managed by the EIB under the Investment Facility and up to EUR 1.7 billion is in the form of loans from the EIB's own resources. The Investment Facility is a revolving facility (loan amortizations will be invested in new operations), aiming at supporting technically, environmentally, financially and economically sound projects in the private or the commercially run public sector.
For further information about the EIB's activities, please visit its Web Site at http://www.eib.org/ or http://www.eib.org/acp.