City to borrow money for infrastructure

THE Windhoek Municipality plans to get a loan of more than N$184 million to finance major projects within the city.

These include the Robert Mugabe Road extension at a total estimated cost of N$82,9 million, the Sam Nujoma Soccer Stadium which cost N$57,9 million, as well as borehole drilling, new fire stations, the extension to Hochland Road, the replacement of the water reticulation network and an additional connection to the western pump station. Because the City does not have a borrowing policy in place, it has not been able to borrow money externally and has taken on projects which it has had to finance in advance.Most of the projects are social in nature, meaning that they will never generate money to pay for their construction.The servicing of a potential loan would have to be financed from other sources.At its last council meeting for this year, the City decided against funding these projects from savings, given that the facilities will be used for at least 20 years.It has rather been decided that external founding be sought and the loans be paid off over time.The City now plans to call for tenders for funding the projects against a normal business loan over a maximum period of twenty years, at a fixed interest rate.The council also noted that it will need to make contributions to the establishment of the Central Regional Electricity Company (Central RED).The City might not have the required start-up capital available, or the money to pay benefits to employees who will be transferred to the new company.In accordance with the Local Authorities Act, the Council will not be allowed to borrow money outside Namibia.A draft borrowing policy for capital projects for the City is expected to be presented to Council in the New Year.Because the City does not have a borrowing policy in place, it has not been able to borrow money externally and has taken on projects which it has had to finance in advance.Most of the projects are social in nature, meaning that they will never generate money to pay for their construction.The servicing of a potential loan would have to be financed from other sources.At its last council meeting for this year, the City decided against funding these projects from savings, given that the facilities will be used for at least 20 years.It has rather been decided that external founding be sought and the loans be paid off over time.The City now plans to call for tenders for funding the projects against a normal business loan over a maximum period of twenty years, at a fixed interest rate.The council also noted that it will need to make contributions to the establishment of the Central Regional Electricity Company (Central RED).The City might not have the required start-up capital available, or the money to pay benefits to employees who will be transferred to the new company.In accordance with the Local Authorities Act, the Council will not be allowed to borrow money outside Namibia.A draft borrowing policy for capital projects for the City is expected to be presented to Council in the New Year.