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AFRICAN DEVELOPMENT BANK
PROJECT: THE NEW PORT OF WALVIS BAY CONTAINER
TERMINAL PROJECT
COUNTRY: THE REPUBLIC OF NAMIBIA
PROJECT APPRAISAL REPORT
OITC DEPARTMENT
July 2013
Appraisal
Team
Sector Director: Amadou Oumarou, Officer-In-Charge, OITC
Regional Director: Ebrima Faal, SARC
Sector Manager: Amadou Oumarou, OITC.2
Team Leader: Mam Tut Wadda-Senghore, OITC.2
TABLE OF CONTENTS
Currency Equivalents ............................................................................................................................... i
Acronyms and Abbreviations ................................................................................................................... i
Loan Information ..................................................................................................................................... ii
Project Summary .................................................................................................................................... iii
Results Based Logical Framework ......................................................................................................... iv
Project Timeframe ................................................................................................................................... v
I - STRATEGIC THRUST & RATIONALE ....................................................................................... 1
1.1 PROJECT BACKGROUND ............................................................................................................. 1
1.2 PROJECT LINKAGES WITH COUNTRY STRATEGY AND OBJECTIVES ............................................. 2
1.3 RATIONALE FOR BANK’S INVOLVEMENT ................................................................................... 2
1.4 DONORS COORDINATION ............................................................................................................ 3
II - PROJECT DESCRIPTION ............................................................................................................. 4
2.1 PROJECT DEVELOPMENT OBJECTIVES ......................................................................................... 4
2.2 PROJECT DESCRIPTION AND COMPONENTS ................................................................................. 4
2.3 TECHNICAL SOLUTION RETAINED AND OTHER ALTERNATIVES EXPLORED ................................ 4
2.4 PROJECT TYPE ............................................................................................................................. 5
2.5 PROJECT COST AND FINANCING ARRANGEMENTS ...................................................................... 5
2.6 PROJECT’S TARGET AREA AND BENEFICIARIES .......................................................................... 7
2.7 PARTICIPATORY PROCESS FOR PROJECT DESIGN AND IMPLEMENTATION .................................. 7
2.8 BANK GROUP EXPERIENCE, LESSONS REFLECTED IN PROJECT DESIGN ...................................... 8
2.9 KEY PERFORMANCE INDICATORS ............................................................................................... 8
III - PROJECT FEASIBILITY ............................................................................................................... 8
3.1 ECONOMIC AND FINANCIAL PERFORMANCE ............................................................................... 8
3.2 ENVIRONMENTAL AND SOCIAL IMPACTS ................................................................................. 11
IV - IMPLEMENTATION ................................................................................................................... 12
4.1 IMPLEMENTATION ARRANGEMENTS ......................................................................................... 12
4.2 MONITORING ............................................................................................................................ 15
4.3 GOVERNANCE ........................................................................................................................... 16
4.4 SUSTAINABILITY ....................................................................................................................... 16
4.5 RISK MANAGEMENT.................................................................................................................. 17
4.6 KNOWLEDGE BUILDING ............................................................................................................ 17
V - LEGAL INSTRUMENTS AND AUTHORITY ........................................................................... 18
5.1 LEGAL INSTRUMENT ................................................................................................................. 18
5.2 CONDITIONS ASSOCIATED WITH BANK’S INTERVENTION ........................................................ 18
5.3 COMPLIANCE WITH BANK POLICIES ......................................................................................... 19
VI - RECOMMENDATION ................................................................................................................. 19
Appendix I. Country’s Comparative Socio-Economic Indicators
Appendix II. Table of ADB’s Portfolio in the Country
Appendix III. Key Projects Financed by the Bank and other DP in the Country
Appendix IV. Map of the Project Area
Currency Equivalents March 2013
1.00 UA = ZAR 13.5555
NAD 1.00 = ZAR 1.00
Fiscal Year 01 April – 31
March
Weights and Measures 1metric tonne = 2204 pounds (lbs)
1 kilogramme (kg) = 2.200 lbs
1 metre (m) = 3.28 feet (ft)
1 millimetre (mm) = 0.03937 inch (“)
1 kilometre (km) = 0.62 mile
1 hectare (ha) = 2.471 acres
Acronyms and Abbreviations
AfDB African Development Bank
B/C Benefits to Cost Ratio
CSP Country Strategy Paper
DFI Development Finance Institution
DRC Democratic Republic of the Congo
EIRR Economic Internal Rate of Return
E&S Environmental & Social
ESIA Environmental and Social Impact
Assessment
ESMP Environmental and Social Management
Plan
EPC Engineering Procurement Construction
EPZ Export Processing Zone
FIATA International Federation of Freight
Forwarders Associations
FIDIC International Federation of Consulting
Engineers
FIRR Financial Internal Rate of Return
GDP Gross Domestic Product
GON Government of Namibia
HSE Health, Safety and Environment
IRR Internal Rate of Return
JAR Joint Annual Review
JIBAR Johannesburg Interbank Agreed Rate
JICA Japan International Cooperation Agency
ICB International Competitive Bid
KfW Kreditanstalt fur Wiederaufbau
MIC Middle Income Country
NAD /N$ Namibian Dollar
Namport Namibia Ports Authority
NDP National Development Plan
NPV Net Present Value
PCR Project Completion Report
PESC Project Executive Steering
Committee
PIC Project Implementation Committee
PIDA Programme for Infrastructure
Development in Africa
PIU Project Implementation Unit
PPP Public-Private Partnership
QGC Quay Gantry Crane
RAMSAR Convention on Wetlands of
International Importance, especially
as Waterfowl Habitat
RTG Rubber Tyred Gantry Crane
SACU South African Customs Unit
SADC Southern African Development
Community
STS Ship to Shore Cranes
SWAp Sector-Wide Approach
TEU Twenty-foot Equivalent Unit
TIPEEG Targeted Intervention Programme
for Employment and Economic
Growth
US$ United States Dollar
UA Unit of Account
WBCG Walvis Bay Corridor Group
WBNLD CMC Walvis Bay Ndola Lubumbashi
Development Management
Committee
ZAR South African Rand (currency)
ii
LOAN INFORMATION
Client’s information
BORROWER: Namibian Ports Authority (Namport), with Sovereign Guarantee
from the Republic of Namibia
PROJECT NAME: The New Port of Walvis Bay Container Terminal Project
LOCATION: Walvis Bay, Namibia
EXECUTING AGENCY: Namibia Ports Authority (Namport)
Financing plan
ADB’s key financing information
Financing Details Loan Grant
Loan currency South African Rand (ZAR) UA
Loan Type Enhanced Variable Spread Loan MIC TA Grant
Lending Rate Base Rate + Funding Cost Margin +
Lending Spread NA
Base Rate Floating Base rate based on 3 month Jibar
with free option to fix the Base rate. NA
Funding Cost Margin *1 NA
Lending Spread 60 basis points (0.60%) NA
Commitment fee* N/A NA
Other fees* N/A NA
Repayment Semi-Annual NA
Tenor Up to 20 years NA
Grace period Up to 5 years NA
FIRR, NPV (base case) 15%, NAD216 million
EIRR (base case) 14.6%
Timeframe - Main Milestones (expected)
Concept Note approval March 2013
Project approval July 2013
Effectiveness January 2014
Completion June 2019
Grant closing date December 2017
Last Disbursement (loan) December 2019
First Repayment (loan) August 2019
Last repayment August 2033
1 The six-month adjusted average of the difference between (i) the refinancing rate of the Bank as to the
borrowings linked to 3-month JIBAR and allocated to all its floating interest loans denominated in ZAR and (ii)
3-month JIBAR ending on 30 June and on 31 December. This spread shall apply to 3-month JIBAR which resets
on 1 February, 1 May, 1 August and 1 November. The Funding Cost Margin shall be determined twice per year
on 1 July for the semester ending on 30 June and on 1 January for the semester ending on 31 December.
Source Amount (ZAR) Amount (UA) Instrument
ADB loan 2,982 million (87.2%) 219.91 million Project Loan
ADB MIC TA Grant 14.00 million (0.4%) 1.00 million Technical Assistance
Namport 173 million (5.1%) 12.77 million Counterpart Funding
Government Grant 250 million (7.3%) 18.44 million Counterpart Funding
TOTAL COST 3,419.00 million 252.12 million
iii
PROJECT SUMMARY
Project Overview
The Port of Walvis Bay is operated by the Namibian Port Authority (Namport) and serves as a
gateway linking some of southern Africa’s major trading regions to international markets. In
response to increased trade-related traffic volumes, Namport is embarking on an expansion
program to raise the container throughput capacity from 355,000 TEUs to 1,005,000 TEUs.
The project scope comprises the construction of a new container terminal on reclaimed land
from the Walvis Bay channel supported by complementary initiatives on logistics and
capacity building. The total project cost estimate is ZAR3,419 million (UA252.12 million),
with 87.6% financed by the Bank through an ADB Sovereign Guarantee Loan of ZAR2,982
million (UA219.91 million) and a MIC TA Grant of UA1.00 million (ZAR14 million). The
remaining 12.4% of the total project estimate, or ZAR423 million (UA31.21) will be financed
by Namport including a grant from the Government of Namibia of ZAR250 million (7.3%).
The project implementation is over a period of three (3) years. The expected project outcomes
include improved efficiency of the port and increase in cargo volumes as a result of increased
trade in the region, spurring inter regional trade and regional integration, private sector
development, employment creation and promotion of inclusion, economic growth and poverty
reduction. The project’s beneficiaries are extensive, ranging from the populations and
governments of Namibia and the SADC countries, the trade and logistics industry, consumers
and exporters at national, regional and international level.
Needs Assessment
The necessity to expand the container terminal at the Port of Walvis Bay arises from the
significant growth in freight traffic in recent years and increasing demand for port capacity
due to increasing economic activities and trade in the SADC region and in Africa in general.
This trend is expected to continue and Namibia aims to maximise its potential and strategic
location to become a trade hub for the region thereby enhancing trade and regional integration
and yielding high and sustained economic growth; alleviating poverty in the country and the
SADC region as a whole. The port is currently operating at capacity and timing and urgency
are of the essence to take advantage of the opportunities on offer before this is lost to
competing ports / countries in the region.
Bank’s Added Value
The rationale for the Bank’s involvement is multifaceted: i) the Bank is proactive in the
development of major regional trade corridors, and brings to the project a wealth of
experience, providing a holistic outlook and wider reach in connecting the continent’s key
infrastructure and missing links; ii) the Bank is assisting in the diversification and distribution
of port facilities on the southern-west coast of Africa and provides the much needed
alternative (to South African ports) for the SADC landlocked countries to access international
markets; iii) the project is potentially serving up to seven major economies in the SADC
region influencing increased inter-regional and international trade and related activities.
Through this project, the Bank is promoting regional integration, private sector development
and jobs creation leading to significant economic development in the SADC region.
Knowledge Management
The project provides an excellent opportunity for new skills to be developed both within the
Bank and in Namibia. Within the Bank, it is an opportunity to further strengthen its
knowledge on ports and regional integration which will feed into the Bank’s knowledge
series. In Namibia, the project provides opportunities for trainings, skills transfers and
capacity building which help to increase the skills base in the country, help create sustainable
employment and reduce poverty.
iv
RESULTS BASED LOGICAL FRAMEWORK
Country and Project Name: Namibia – The Strategic Expansion of the Walvis Bay Container Terminal
Purpose of the Project: Establish the Port of Walvis Bay as the preferred African West coast port for southern and central African logistics operations
RESULTS CHAIN PERFORMANCE INDICATORS MEANS OF
VERIFICATION RISKS/MITIGATION MEASURES
Indicator Baseline Target
IMP
AC
T Improved economic
performance
Real GDP Growth
3.8% (2011) 5% - 6% (2020) African Economic
Outlook database Outcome Risks
i) Competing routes/ ports take over trade volumes;
ii) Government fails to implement its plans
iii) Regional logistics environment gets worse
Mitigation measures
i) sound strategies/ business plan; complementary
infrastructure; promote port and corridor use
ii) implement NDP4 action plan, develop and
implement logistics master plan.
iii) strengthen capacity on advocacy tackling regional
non-tariff barriers on corridors OU
TC
OM
ES
1.1 Improved efficiency of the
Port
1.2 Increased trade
1.3 Improved logistics
competence
1.1 i) Berthing moves per hour
(BMPH); ii) Vessel waiting time; iii)
Dwell time
1.2 Volume of containers handled
1.3 LPI: Logistics Performance Index
1.1 i) BMPH = 20; ii) 8
hours; iii) 14.5 days
average
1.2 334,000 TEU
1.3LPI = 2.65 out of 5
(89th out of 155
countries) (2012)
1.1 i) BMPH = 60; ii) less
than 8 hrs; iii) 8-10 days
average
1.2 70% growth TEU
1.3 LPI – at least 3.00/5
(2020)
Port Statistics
Corridor Group Data
World Bank Data
OU
TP
UT
S
Component A: New container
terminal constructed and STS
cranes installed and operational
Component B: RTG equipment
installed & operational
Component C: i) Pilots and
STS Operators trained for new
terminal and equipment; ii)
Nationals employed
Component D: i) Logistics
master plan study, ii) Road
Safety study, iii) Capacity
Building for WBNLD CMC
and WBCG completed,
iv)Freight forwarders trained
2.1 Size / capacity of new terminal and
No. of operational STS cranes
supplied
2.2 No. of operational RTG cranes
supplied
2.3 No. of Pilots and STS crane
operators trained;
2.4 No of Nationals employed in the
project
2.5 Logistics report
2.6 road safety action plan
2.7 Permanent Secretariat for Walvis
Bay-Ndola-Lubumbashi Corridor
established
2.8 No. of freight forwarders trained
2.1 TEU = 0; STS = 0
2.2 RTGs = 0
2.3 Pilots = 0, STS
Operators = 0,
2.4 Nationals = 0
2.5 Logistics report = 0
2.6 Permanent secretariat
= 0
2.7 Road safety action
pan = 0
2.8 Freight forwarders
trained = 0
(2012)
2.1 Capacity = 650,000
TEUs, STS cranes = 4
2.2 RTGs = 8
2.3 Pilots = 6, STS
Operators = 16
2.4 Nationals employed =
900 (including 300 women)
2.5 Logistics report = 1
2.6 Permanent secretariat
= 1
2.7 1 road safety action
plan = 1
2.8 freight forwarders
trained = 70 (40 women)
(2017)
Progress reports,
Bank supervision
reports,
Audit reports,
Midterm review
reports,
Namport quarterly
reports
Output Risks
i) Procurement delays and late project start up; ii)
Construction risks; iii) Environmental risks
Mitigation measures
i) Use of Advanced Contracting reduces procurement
delays; ii) Use of EPC fixed price lump-sum and
time certain contract plus effective project and risk
management mitigates against construction risks; iii)
Close supervision and effective implementation of
ESMP & E&S action plan mitigates against
environmental risks. (refer to section 4.5 for more
details)
KE
Y A
CT
IAV
ITIE
S
COMPONENTS INPUTS
Component A: Terminal construction
Component B: Equipment
Component C: Ancillary Activities
Component D: Logistics & Capacity Building
Costs ( UA million) ( ZAR million)
Terminal Construction 179.32 2,431.00
Equipment 12.84 174.00
Ancillary Activities 20.51 278.00
Logistics & Trade Facilitation 0.83 12.00
Base Cost 213.50 2,895.00 Physical Contingency (10%) 21.35 290.00
Price Contingency (2%FE, 5%LC) 17.27 234.00
Total 252.12 3,419.00
Sources of financing:
% UA million ZAR million
ADB loan [87.2%] 219.91 2,982.00
ADB MIC Grant [0.4%] 1.00 14.00
Namport [5.1%] 12.77 173.00
Government Grant [7.3%] 18.44 250.00
Total [100%] 252.12 3,419.00
v
PROJECT TIMEFRAME
1
REPORT AND RECOMMENDATION OF THE MANAGEMENT OF THE ADB GROUP
TO THE BOARD OF DIRECTORS ON A PROPOSED LOAN & GRANT TO NAMIBIAN
PORTS AUTHORITY (NAMPORT) FOR THE NEW PORT OF WALVIS BAY
CONTAINER TERMINAL PROJECT
Management submits the following Report and Recommendation on a proposed loan for ZAR
2,982 million (UA219.91 million) to the Namibian Ports Authority (Namport) to finance the
New Port of Walvis Bay Container Terminal Project in Namibia and a proposed MIC
Technical Assistance Fund Grant for UA1.00 million to the Republic of Namibia to finance
Logistics and Capacity Building activities complementing the Port Project.
I - STRATEGIC THRUST & RATIONALE
1.1 Project Background
1.1.1 Namibia is strategically located on the west coast of Southern Africa with 1,600km of
coastline on the Atlantic and bordering on the north, east and south with Angola, Zambia,
Botswana and South Africa respectively. The Ports of Walvis Bay and Lüderitz are Namibia’s
only ports with the former being Namibia’s main commercial port, located on the main
trading maritime corridor on the Atlantic. The Walvis Bay port is a sheltered deep-water
harbour protected by a natural bay and benefiting from a temperate climate with no delays due
to bad weather. The port has a designed container terminal capacity of 355,000 TEU and is
served by well maintained, safe and secure transit corridors providing fast and easy access to
the hinterland and neighbouring countries (see map in appendix iv). The port positions as
transhipment hub along the western African coastline and preferred access point into SADC
providing the shortest direct route to Europe and the Americas without the congestion delays
faced by competing ports in the region.
1.1.2 The Walvis Bay Port is operated and managed by a State Owned Enterprise (SOE) -
the Namibian Ports Authority (Namport) - under the “service port” model. Namport reports to
the Minister of Works and Transport as well as the State Owned Enterprises Governance
Council (SOEGC), which control its operations and port policies and regulations. As part of
ongoing reforms, Namport is investigating to further improve its efficiency by adopting the
“landlord port” model whereby the functions of the authority and operator are separated and
port operations are handled by a private entity.
1.1.3 The traffic at the Port of Walvis Bay and along its transport corridors has grown
significantly in the past few years. Cargo volumes almost doubled from 145,000 TEUs to
337,000TEUs between 2005 and 2012 with a record increase in revenue of N$755 million in
2012 (N$ 647 million in 2011), against a target of N$653 million. The increasing trade is
mainly in transit and transhipment which make the bulk of container traffic at the port.
Transshipment traffic has grown from 92,000 TEUs in 2006 to 218,000 TEUs in 2012 with an
average annual growth rate (AAGR) of 55%. Transit traffic has also grown over the same
period from 25,000 TEUs to 65,000TEUs with AAGR of 25%.
1.1.4 Namport’s strategy centers on adopting a hub and spoke distribution model for
transshipment serving the South, Central and West African coastline and a Gateway for transit
traffic for the SADC landlocked countries. To achieve this strategy and in order to sustain
future growth and attract new businesses, the expansion of the port and related facilities is
required. The port is currently operating at capacity and equipment use is at a maximum. It is
against this background that the Namibian Ports Authority submitted a request to the African
Development Bank to finance the expansion of the Walvis Bay container terminal to
accommodate additional 650,000 TEUs capacity.
2
1.2 Project linkages with country strategy and objectives
1.2.1 The Walvis Bay port features as a regional hub in the SADC Regional Infrastructure
Development Master plan providing the region with the much needed west coast direct access
to regional and international markets and easing the exclusive dependence on the eastern ports
in South Africa, Mozambique and Tanzania. Namibia’s Vision 2030, the National Poverty
Reduction Action Plan and the National Development Plan (NDP 4) (2012/13 – 2016/17)
attributes considerable significance to the logistics and transport sector, geared towards
economic development and poverty reduction. This strategy is expanded in the transport
sector’s Integrated Transport Master Plan (2013-2023) and the Namport Business Plan 2013-
2017 (Corporate), of which this project is a priority, has been developed in the spirit of the
above national strategies.
1.2.2 The Southern African Development Community (SADC) is currently one of the
strongest RECs in Africa in terms of economic strength by country GDP. Economic growth
rates during the past few years averaged 5.9% making it one of the fastest growing developing
sub-regions with direct linkage to growth in trade. Total SADC trade almost quadrupled
between 2000 and 2011 from US$91,089.52 million in 2000, to US$353,636.4 million in
2011. Africa’s potential for growth is quite high and future freight demand is expected to
double by 2020 and increase by a factor of 6 by 2040. This corresponds to an average GDP
growth of 6% per year. Transit traffic from landlocked countries is expected to increase by
10-14 times over the next 30 years and for the SADC, this traffic will increase from 13
million to 148 million tons. This is a very large increase in demand and is the context and
rationale of the Namibian government’s efforts to maximise its potential and strategic location
to become a trade hub for the region. Timing and urgency are of essence in this regard, as
other countries within the region are also developing plans to take advantage of the
opportunities on offer.
1.2.3 One of the great opportunities for Namibia to be positioned as a logistics hub is its
strategic location within the SADC region, offering a gateway for trade. Secondly, Namibia’s
transport and communication infrastructure remains competitive in relation to what is
available in the region. Notwithstanding the developments of ports in the region, the Port of
Walvis Bay remains one of Africa’s most efficient and best equipped. Thirdly, safety and
security in the country also ensure that goods transported via road and rail, reach their
intended destinations without tampering. In addition to the facilitation of flows of imports,
exports and trans-shipments via Namibia, the availability of a good international logistics
network will also attract other industries to Namibia. Namibia’s business environment is
relatively conducive, thus logistics has the ability to create sustainable employment
opportunities, and contribute to economic prosperity and poverty reduction.
1.3 Rationale for Bank’s involvement
1.3.1 The port expansion project addresses three core operational priorities of the Bank’s
Ten Year Strategy (2013-2022). These are infrastructure development, regional integration
and private sector development.
i) Infrastructure development: the port of Walvis Bay is Namibia’s main commercial port
and links the country’s multimodal transport corridors to local, regional and
international markets. This project will bring a better distribution of port facilities on
the west coast of Africa and provides the much needed alternative (to South African
ports) for the SADC landlocked countries. It stimulates the development and upgrade of
multimodal transport corridors linking the port to the hinterland and to the SADC
region; improving the country’s transport and logistics chains, reducing transportation
costs and stimulating economic growth.
3
ii) Regional integration: the project is potentially serving up to seven major economies
(Namibia, Angola, DRC, Zambia, Botswana, Zimbabwe and South Africa), each of
trade significance to the economy of the sub-Saharan sub-continent. One of the
rationales for the Bank’s involvement is geographical coverage of the economic
developmental impact that the project brings to the region through trade activities and
spill overs on business and jobs creation. The project also serves to foster South-South
cooperation, and provides the opportunity to strengthen commercial linkages and
promote new trading partners for the region.
iii) Private sector development: the spillover effects of this intervention are private sector
development and employment creation principally in the trade and logistics industry but
also in tourism. The project promotes the emergence of small to medium size
enterprises, scaling up of private investments, increasing productivity and
competitiveness, creation of employment opportunities and promotion of inclusion and
economic transformation.
1.3.2 Apart from the Bank’s ten year strategy, the project also aligns with the Southern
Africa Regional Integration Strategy Paper (RISP) 2011-2015 and the CSP 2009-2013,
through increased competitiveness and promoting intra and inter-regional trade. It is amongst
the PIDA priorities responding to Southern Africa’s challenge in developing sufficient port
capacity to handle future demand from both coastal and landlocked countries under the
Southern Africa Hub Port and Rail Programme.
1.4 Donors coordination
1.4.1 Donor coordination in Namibia is carried out at national and at sector level. At the
national level the National Planning Commission NPC (Director-General) co-chairs the
Annual High Level Development Partner Forum attended by Ministers of relevant Line
Ministries and representatives from Donors. At the sector level, sector working group
meetings are held bi-annually and key issues emanating from these discussions then feed into
the high level Forum. The Bank’s newly opened South Africa Resource Centre (SARC)
provides closer proximity to the Namibian clients and will permit stronger dialogue and Bank
presence in Namibia.
1.4.2 The World Bank and many of the UN Agencies scaled down their support to Namibia
following its classification as an upper MIC in 2009. Between 2008 and 2012, Germany
featured as the country’s largest donor (over N$2 billion), followed by the U.S. (NS$1.8
billion), China (N$1.6 billion), the European Commission (N$0.75 billion), Finland, Japan,
France (approximately N$0.5 billion each), the World Bank (N$0.1 billion) and others
including the African Development Bank (N$0.2 billion total).
1.4.3 In the roads subsector, the Government moved to Sector-Wide Approach (SWAp)
with the German Government and the European Union (EU) being the main partners. In
aviation, the Bank is providing support through a MIC TA Grant (UA0.59million) for a study
of 8 Namibian Airports including the main international airport. In maritime, financial support
has mainly come from the government and through loans from local commercial banks. The
German cooperation (KfW), JICA and the EIB have provided grants for various studies for
the Walvis Bay port expansion project. The Government allocates between 8% - 10% of the
national budget to the transport sector and over the Medium-Term Expenditure Framework
covering the period 2011/12-2013/14 allocated NAD8.2 billion for, among others:- expansion
of the port of Walvis Bay, rehabilitation and railway infrastructure management, and
development and maintenance of national roads infrastructure.
4
II - PROJECT DESCRIPTION
2.1 Project development objectives
2.1.1 The sector goal of the project is to promote trade and regional integration. The
expected long-term impact of the project includes increased and sustained trade between
SADC and the outside world.
2.1.2 The objective of the project is to increase the capacity and efficiency of the Walvis
Bay Port to respond to the growing freight demand whilst promoting an alternative maritime
access on the Southwestern coast of Africa to serve the SADC landlocked countries. The
expected outcomes of the project include: improved port efficiency, increased cargo volumes,
improved logistics performance and increased inter-regional and international trade.
2.2 Project description and components
The project will expand the Walvis Bay port container terminal on reclaimed land
from the Walvis Bay channel, to increase the annual throughput capacity from 355,000TEUs
to 1,005,000TEUs. The Project will also include a logistics and capacity building component
to complement the port expansion project. The project components are presented in Table 2.1.
Table 2.1 : Project Components
Component (ZAR
Million)
(UA
Million) Component Description
A. New terminal
construction on
reclaimed land
2,871 211.75 Construction of a modern container terminal consisting of quay
walls, STS (ship-to-shore) cranes, paved areas, buildings, roads,
railway lines and services reticulation.
B. Equipment 206 15.15 Supply and installation of RTG (rubber tired gantry) cranes and
relocation of the existing from the current container terminal.
C. Ancillary
activities
328 24.22 Supply and installation of terminal operating system, communication
system, workstations, electricity supply upgrade, pilot and operator
trainings, etc. to complete the terminal expansion project
D. Logistics and
Capacity
Building
14 1.00 The component includes i) developing a national logistics master
plan, ii) a road safety program on transit corridors, iii) capacity
building for the Walvis Bay Corridor Group and the Walvis Bay-
Ndola-Lubumbashi Development Corridor Management Committee
and iv) a specialised training for freight forwarders (FIATA training)
Total Project
Cost 3,419 252.12
2.3 Technical solution retained and other alternatives explored
The technical solution retained was influenced by three determining factors: i) project
location, ii) contract type and iii) financing package. The solution retained was after series of
studies, investigations and consultations by Namport and its consultants. The solution retained
is a port expansion project located southwest of the current port terminal on reclaimed land
from the Walvis Bay channel. The project location allows fulltime works with minimal
disruption to normal operation and scope for future expansion. The contract type for the main
civil works is an EPC contract allowing an integrated solution, whilst the financing is an ADB
Sovereign Guarantee loan to Namport which responds to the urgency to implement the project
without any further delays. Private financing would have required the finalisation of the PPP
framework and reform of the port to transfer its operations to a private developer. This
solution was found to be technically, economically, financially and environmentally the most
sustainable. Table 2.2 summarises the alternatives explored and reasons for their rejection.
5
Table 2.2 : Project Alternatives Considered and Reasons for Rejection
Alternative Brief Description Reasons For Rejection
Project location
Current
terminal
Extending the existing
container quays north-
eastwards
Limited length of quay extension
Significant impact on port operations and existing
factories
Enormous costs for expropriations and compensation
Little scope for future expansions
Fishing port
area
Developing a new
container terminal at the
fishing port area
Significant environment and social impacts on the
fishing business
Enormous costs for expropriations and compensation
Little scope for future expansions
Project contract
Traditional
Contracts
Procuring detailed
design and construction
separately
Significant risk exposure due to technical complexity
of the project
No overlap of design and construction
Lengthy process
Financing package
PPP – Full
concession
private sector–sponsored
project developing the
new container terminal
as a standalone business
unit
To privatize such a strategic national asset at this
point in time was seen not to be in the country’s best
interest
There is currently no PPP legal framework for port
projects in Namibia
Time to setup the legal framework is a lengthy
process; when the project is urgently needed
Possible backlash with labour organisation
2.4 Project type
The ADB financing will support the construction and rehabilitation of identified
economic and social infrastructure. The investments against which funds are to be disbursed
are well defined and specific. Therefore, the specific project loan has been chosen as the most
appropriate instrument for the intervention of the Bank in this port expansion project. In the
same regard, the MIC TA Grant has been determined to be the most appropriate instrument to
finance the logistics and capacity building activities.
2.5 Project cost and financing arrangements
2.5.1 The total project cost at appraisal (net of all taxes/duties) including physical and price
contingencies, is ZAR3,419 million (UA252.12 million) of which ZAR2,083 million
(UA153.63 million) or 61% of the total cost estimate is in foreign exchange and ZAR1,336
million (UA98.5 million) or 39% of the total cost estimate is in local currency.
2.5.2 The project cost estimates were based on feasibility studies conducted in 2010, by the
design consultants; taking into account international norms, prevailing rates and contract risk
distributions. The costs were updated in 2012 after series of supplementary studies conducted
to reconfirm the project’s feasibility. Also, during appraisal, the Mission and Namport
carefully reviewed and confirmed the quantities and unit rates of each project component and
included contingencies for execution and price escalation. The project components and costs
are presented in table 2.3.
6
Table 2.3: Project costs by component (Net of Taxes)
Components
ZAR (million) UA (million) Foreign
Exchange
% Foreign
Exchange
Local
Currency Total
Foreign
Exchange
Local
Currency Total
A. New terminal
construction
1,487 944 2,431 109.71 69.61 179.32 61%
B. Equipment 154 20 174 11.36 1.48 12.84 89%
C. Ancillary activities 118 160 278 8.71 11.80 20.51 42%
D. Logistics & Capacity
Building 5 7 12 0.31 0.52 0.83 37%
Total Base Cost 1,764 1,131 2,895 130.10 83.41 213.50 61%
Physical contingencies 176 114 290 13.01 8.34 21.35
Price escalation 143 91 234 10.52 6.75 17.27
Total Project Cost 2,083 1,336 3,419 153.63 98.50 252.12 61%
2.5.3 The expansion of the port will be co-financed by the Bank, Namport and the
Government of Namibia. The Bank will finance 87.6% of the total project cost amounting to
ZAR 2,996 million or UA220.91 million. The Bank’s financing will be in the form of an ADB
Sovereign Guarantee Loan of ZAR 2,982 million (UA219.91 million) and MIC TA Grant of
UA1.00 million (ZAR14 million). Namport’s counterpart contribution is 12.4% of total
project cost estimate, comprising a grant from the Government of Namibia of ZAR250
million (UA18.44million) or 7.3% of total project cost estimate and Namport contribution of
ZAR173 million (UA12.77 million). Namport has indicated that there are other project
activities up to a total of ZAR300 million which will be financed by Namport. The source of
financing and the project expenditure schedule are summarised in table 2.4 and 2.5
respectively and justification of the Bank’s contribution of more than 50% of total project cost
estimate is provided in annex I.
Table 2.4: Sources of financing
Source
ZAR (million) UA (million) Total
Project
(%) Foreign
Exchange
Local
Currency Total
Foreign
Exchange
Local
Currency Total
ADB (Loan ) 1,839.00 1,143.00 2,982.00 135.60 84.31 219.91 87.2%
ADB (MIC Grant) 5.00 9.00 14.00 0.40 0.60 1.00 0.4%
Namport 98.16. 74.84 173.00 7.21 5.56 12.77 5.1%
Government Grant 141.84 108.16 250.00 10.42 8.02 18.44 7.3%
Total Project Cost 2,083.00 1,336.00 3,419.00 153.63 98.50 252.12 100%
Table 2.5: Source of financing by component
Components
ZAR (million) % Bank
contribution
% Namport
& GON
contribution Total
Cost
ADB
Loan
MIC TA
Grant
Namport
& GON
A. New terminal construction 2,431 2,236 - 195 92% 8%
B. Equipment 174 171 - 3 98% 2%
C. Ancillary activities 278 118 - 160 42% 58%
D. Logistics & Capacity Building 12 - 12 - 100% 0%
Total base cost 2,895 2,525 12 358 87.6% 12.4%
Physical contingencies 290 253 1 36
Price escalation 234 204 1 29
Total Project Cost 3,419 2,982 14 423 87.6% 12.4%
7
Table 2.6: Project cost by category of expenditure
Category
ZAR (million) UA (million) % of
total base
cost Foreign
Exchange
Local
Currency Total
Foreign
Exchange
Local
Currency Total
Goods 191.00 59.00 250.00 14.06 4.33 18.39 9%
Works 1,487.00 1,031.00 2,518.00 109.71 76.04 185.75 87%
Services 86.00 41.00 127.00 6.33 3.03 9.36 4%
Total Base Cost 1,764.00 1,131.00 2,895.00 130.10 83.41 213.50 100%
Physical
contingencies 176.00 114.00 290.00 13.01 8.34 21.35 10%
Price escalation 143.00 91.00 234.00 10.52 6.75 17.27 7%
Total Project Cost 2,083.00 1,336.00 3,419.00 153.63 98.50 252.12
2.6 Project’s target area and beneficiaries
2.6.1 In general, the project will affect the SADC region and countries on the southern West
African coastline up to Ghana; therefore the project impact footprint covers the Southern,
Central and West Africa subcontinent.
2.6.2 Poverty is one of the major development challenges in Africa including the SADC
region and is reflected in the high level of unemployment, low levels of income and high
levels of human deprivation with 40% of the SADC’s population living below the
international poverty line of US$1 per day. The main economic objective of the SADC region
is therefore on the development of an environment, conducive to regional integration,
economic growth, poverty eradication and establishment of a sustainable path of
development. By so doing, the region will emerge as competitive in the world economy. The
development prospects by the project contribute towards the development agenda above as
the project will directly benefit the people, the governments and the private sector in Namibia,
Angola, Zambia, Botswana, DRC, Zimbabwe and South Africa. The benefits include
increased opportunities for trade, jobs creation and capacity building resulting in inclusive
growth and economic transformation promoting poverty alleviation in the SADC region.
2.7 Participatory process for project design and implementation
2.7.1 The formulation, design and financing of the project benefited from the wide
consultations carried out by Namport and its consultants and the Bank project appraisal team,
through bilateral and town hall meetings, and sharing of interim and final project reports. The
key stakeholders consulted include government ministries and agencies relating to the sector,
municipal and regional government, the logistics industry including freight forwarders,
international shipping lines, other ports in the region, transport operators and shippers
associations, corridor group, local businesses, local residents, NGOs and specific interest and
the donor community. The consultations served to inform stakeholders of the project and its
direct and indirect impacts and to obtain the stakeholders’ perspectives. The project’s design
and implementation modalities have been shaped by the concerns that were raised.
2.7.2 Amongst the outcomes of these consultations is the confirmation of the Namibian
Government that the project is a national priority and that the government will provide a
guarantee for the ADB loan to Namport. It has also influenced the technical solution retained
to ensure minimal disruption to the ports operations and avoid negative impacts to
neighbouring businesses with adequate measures put in place for environment and social
monitoring. The consultations also resulted in the inclusion of the MIC TA Grant into the
project to support the government’s efforts in logistics and capacity building.
8
2.8 Bank Group experience, lessons reflected in project design
2.8.1 The Bank has extensive operational knowledge in developing infrastructure projects in
Africa. In the maritime subsector, the Bank has experience in design and implementation of
the following port projects: – Lekki Tolaram Port, Lomé container terminal, Djibouti bulk
terminal, Damietta port, Dakar container terminal, and Banjul port. The Bank’s African
Development Report 2010 also provides valuable information on ports in Africa.
2.8.2 In Namibia, the Bank commenced operations since 1992 and financed a total of five
operations in the transport sector amounting to UA71 million including the Trans-Kalahari
road study, Northern railway extension project, Aush-Rosh Pinah Road project, Kamanjab -
Omakange Road Project and the Namibian Airports study. All the operations have been
completed except the airports study which is currently on-going. These operations have
significantly contributed to strengthening Namibia’s transport network and have led to
opening up of isolated areas to access markets as well as link with neighbouring countries.
2.8.3 Through the interventions mentioned above, the Bank has gained significant
experience in the design, preparation and implementation of transport projects in Namibia.
Lessons drawn from the Bank’s previous interventions were taken into consideration in the
design of this project by making the following provisions: i) advanced procurement is used on
the main civil works which helps to gain time of up to 12 months; ii) the main civil works is
packaged under an EPC contract including the supply and installation of STS cranes to ensure
a smooth interface and assign a single point of responsibility for the project delivery; iii)
Namport will continuously monitor the ESMP and outcome indicators to ensure timely
response to any emerging concerns and facilitate measurement of the project’s outcomes; and
v) the Bank is providing a MIC TA Grant for logistics and capacity building to help increase
the skills base in the sector.
2.9 Key performance indicators
The performance indicators linked to the project’s outcome will be determined under
the following areas: (i) berthing moves per hour (BMPH); (ii) vessel waiting time; (iii) dwell
time; iv) volume of containers handled; and (v) logistics competence. The output indicators
include amongst others: i) size of the new port, ii) equipment supplied, iii) pilots and
operators trained for the new terminal, iv) nationals employed, and v) reports from the
logistics and road safety studies. The baseline data for these indicators are readily available
from the port’s data records which are periodically collected as part of the port’s operations.
Collection, monitoring and evaluation of the indicators (disaggregated by gender) will be
under the responsibility of the Namport Project Manager and his team. The Bank will also
monitor during supervision missions, mid-term review and at project completion.
III - PROJECT FEASIBILITY
3.1 Economic and financial performance
Traffic Demand
3.1.1 A consultant commissioned by Namport, undertook a market study for the project in
2011. The study assessed the overall competitiveness of Namport vis-à-vis other competing
ports in the Southern Africa region, namely, the ports of Luanda and Lobito in Angola and
ports of Durban and Cape Town in South Africa. While ports in Angola face congestion in the
foreseeable future, those in South Africa cater mostly for local and transit cargo. Neither will
pose a major threat to Namport which is oriented to being a transhipment hub and an
alternative gateway for transit trade in the SADC region.
9
3.1.2 The consultant prepared traffic forecasts that are disaggregated by three submarkets:
domestic, transit and transhipment. Transhipment accounts for a major share of the traffic
(60% of container traffic) and has increased rapidly in recent years with an average annual
growth of 55%. In the base case, Namibia is expected to have a compounded GDP growth
rate of 6% from 2014 to 2030. Without the expansion project, Namport will be constrained by
its maximum capacity of 355k TEU.
Table 3.1 : Base Case Volume Traffic Projections (kTEU)
2013 2014 2015 2016 2017 2018 2019 2020 2025 2030
Import 78 80 110 125 142 159 171 183 230 230
Export 62 69 95 114 134 151 161 172 230 230
Transhipment 186 190 223 254 284 315 346 377 369 403
Total 327 339 428 493 561 625 678 732 829 863
Economic Analysis
3.1.3 Three major sources of direct economic benefits have been identified: i) time costs
savings for vessels calling at the port; ii) new employment opportunities for nationals; iii)
time costs savings for freight trucks that transport cargo from and to the port. Estimation of
the third benefit is constrained by the scarcity of relevant statistics and is therefore omitted.
However, given that 50% of the total traffic is transshipment that requires no intermodal
operations, the omission of the time savings to trucks is unlikely to lead to a significant
underestimation of the total economic benefits.
3.1.4 Time costs savings is expected to be shared by Namibian and regional consumers and
exporters, and by international shipping lines. Additional traffic translates into higher earnings
for Namport and its staff, which contribute to additional corporate income tax and labour
income tax for the government. The government will also collect more value added tax
revenue from traffic, and indirect taxes, that would otherwise not materialize in the project’s
absence. While taxes are transfers and should not be counted as an economic benefit, they
have a distributional impact and are thus captured in the stakeholder analysis, to explore how
the economic benefits are distributed among stakeholders. These are summarized in table 3.2.
Table 3.2 : Allocation of Projected Benefits among Stakeholders (Present Value, million NAD)
Namibia 2,839
Government 323
Additional labour income 12
Consumers 1,503
Exporters 1,002
Southern African Region 1,252
Consumers 877
Exporters 376
International shipping lines 1,252
3.1.5 The expansion will attract new customers and greater volume from existing ones,
further strengthening Namport’s role as a transshipment hub and spurring economic activities
in related industries. While the foregoing is important in its own right, the benefits identified
in the previous paragraphs are the most immediate, and can be reasonably well quantified. In
this analysis, additional benefits are omitted thus yielding a more conservative estimate. In
general, the expansion project is estimated to generate for Namibia externalities equivalent to
NAD2,839 million with an economic NPV of NAD498 million and EIRR of 14.6%.
10
Financial Analysis
3.1.6 From Namport’s recent audited financial statements, revenues show the impact of the
world trade slow-down owing to the financial crisis. Thus, revenues decreased from NAD 616
million in 2009 to NAD566 million in 2010, but bounced up to NAD755 million in 2012. The
EBITDA exhibited a similar pattern. For the past several years, the debt-equity ratio has been
at low healthy levels and dropped to 0.21 in 2012, indicating strong capacity for additional
borrowing. Since 2011, Namport has been assigned a long term credit rating at A- by Fitch
Ratings and in May 2013, Fitch Ratings reaffirmed Namport’s credit rating and further
upgraded their outlook from Stable to Positive on account of strong government support and
Namport’s strategic importance in the Namibian economy. The company has maintained a
high level of liquidity; on average, cash or cash equivalent has been 61% of sales. The
following table presents Namport’s historical financial indicators and their forecasts.
Table 3.3 : Namport Selected Financial Indicators (million NAD)
Actual Forecast
2009 2010 2011 2012 2014 2016 2018 2020 2022 2024
TEU (000s) 266 256 224 292 339 493 625 732 779 822
Total Revenue 616 566 647 755 856 1,046 1,622 2,030 2,449 2,917
EBITDA 342 241 119 423 687 259 671 737 1,175 1,494
Debt to Equity Ratio 0.31 0.35 0.34 0.21 0.19 1.50 1.61 1.04 0.63 0.35
CF available for debt service N/A N/A N/A N/A 622 435 586 619 1,036 1,328
Total debt service 75 113 171 205 254 253 228 281 441 407
DSCR N/A N/A N/A N/A 2.45 1.72 2.57 2.21 2.35 3.27
3.1.7 A detailed financial model for Namport corporate financial flows was developed by
their financial advisor for this project. Cash flows of the expansion project were integrated
into the corporate financials. The key indicators for financial and economic performance are
derived from the consolidated corporate model of Namport. The average DSCR, based on
consolidated cash flows and both existing and new debt, is estimated to be 2.02x and the
minimum DSCR is 1.30x in 2015. The second debt service period starts with the first
principal repayment of the new loan in 2019, until 2034. Overall, the projections confirm the
strong debt service capacity of Namport.
3.1.8 While debt service capacity has been evaluated based on overall Namport financials,
the investment viability of the expansion plan is assessed on incremental basis, ensuring that
the expansion decision is judged on its own merit, independently from the existing operations
of the port. Under the base case scenario, the Equity NPV for the expansion project is
NAD216 million at a 12% discount rate (real). The Project IRR for the expansion project is
calculated to be 8.5% while the Equity IRR is estimated to be 15.0% in real terms.
3.1.9 Table 3.4 summarises the key financial and economic indicators for the expansion
project confirming that the new terminal expansion is economically and financially viable.
The forecasts indicate that the project generates sufficient operating cash flow to recoup initial
investment costs and to service debt. The project will also bring additional benefits to other
stakeholders. Furthermore, sensitivity analysis results presented in the technical annex shows
that the project is viable despite adverse shocks.
Table 3.4 : Key Financial Performance Indicators
Economic NPV at 12% EOCK (real) 498 million NAD
Economic IRR (real) 14.6%
Equity NPV at 12% ROE (real) 216 million NAD
Equity IRR (real) 15.0%
Project IRR (real) 8.5%
11
3.2 Environmental and Social impacts
3.2.1 The project has been classified as Category 1 in accordance with the Bank’s
Environmental and Social (E&S) Assessment Procedures. Relevant E&S documentation was
prepared, and an Executive Summary of the Environmental and Social Impact Assessment
(ESIA) was disclosed on the Bank’s website on 22nd March 2013. The project will result in
environmental and social (E&S) impacts, although some of these will be low in the nature of
their significance.
3.2.2 An Environmental Management Plan (EMP) has been prepared by Namport to address
these impacts. The Bank has requested Namport to develop a more comprehensive
Environmental and Social Management Plan (ESMP) which would integrate a detailed waste
management plan; a business continuity plan; baseline studies on the effects on the lagoon; a
hazards (especially technological) management plan; an emergency response plan; and a
detailed plan for better assessing and monitoring the socio-economic impacts, amongst other
features. Namport will also undertake additional measures, such as a cumulative impacts
assessment; detailed baselines studies on the effects on the lagoon (siltation and inflow and
outflow rates), sea level rise and climate change impacts; and detailed analysis of the project’s
impacts on utilities. Namport has engaged the services of a consulting firm and is currently
addressing the E&S gaps. The outstanding E&S reports and plans will be submitted to the
Bank as part of the E&S Action Plan, by 30th
September 2013. Once a comprehensive ESMP
is developed building upon the existing EMP, the ultimate costs for mitigating and enhancing
E&S impacts will be known with greater certainty.
Climate Change
3.2.3 The Walvis Bay area is characterized by a chance of 30 cm sea level rise, which
highlights the importance of climate change considerations by the project. A national climate
change action plan has been prepared, and includes strategies for addressing disasters.
Namport is undertaking baseline studies to examine climate change impacts linked to the
project and its business continuity plan and emergency preparedness plan will be aligned to
the National Climate Change Action Plan.
Gender
3.2.4 Following the Bank’s recommendation, Namport is undertaking a gender analysis to
better understand the gender considerations it should appropriately address through the project
and its Corporate Social Responsibility (CSR) initiatives. The project area is characterized by
gender inequities and disparities. To ensure that women benefit from the project,
considerations will need to be introduced, such as job profiles and potential quotas, to
encourage women’s participation in the project’s employment opportunities. Gender-based
violence and the influence of patrilineal traditions are of national concern. Measures will be
enacted to limit a potential rise in the commercial sex industry by the project. Awareness
campaigns on sexually transmitted infections, such as HIV/ AIDS, will integrate gender
sensitive components targeting Namport employees and local communities. The training of
women freight forwarders is an initiative included in the project following concerns raised
during stakeholder consultations whilst further initiatives on gender mainstreaming will be
assessed upon completion of the gender analysis mentioned above.
Social
3.2.5 The project is expected to result in multiple socio-economic benefits including direct
and indirect employment opportunities for Namibians during the construction and operational
phases; educational and training opportunities; skills development options; the promotion of
entrepreneurship; increased trade and economic activities benefiting the construction,
12
transport, hospitality and tourism industries; a growth in new small and medium size
enterprises; and an increased scope for the marina development.
3.2.6 The project will also result in social risks, such as an influx of workers, truckers and
sailors which would add pressure on available resources and infrastructure; an increased risk
of communicable diseases like HIV/AIDS; behavioural changes leading to greater theft,
prostitution and alcoholism; road safety concerns due to increased traffic; and an inability of
local businesses, with leases in the area being targeted for the marina development, to realize
the full value of their recent investments. Through the comprehensive ESMP it is developing
and the CSR initiatives initiated through Namport’s Social Investment Fund, Namport will
work to address and diminish the impact of these social risks.
Involuntary Resettlement
3.2.7 The project will not involve either the physical or economic displacement of any
project affected persons. The expansion works will be undertaken on land belonging to the
Government of Namibia with the terminal facility built on reclaimed land inside current port
limits.
IV - IMPLEMENTATION
4.1 Implementation arrangements
Borrower and Executing Agencies
4.1.1 Namport, a body corporate established under the Namibian Ports Authority Act, 1994
(Act No. 2 of 1994) and operating under the State-owned Enterprises Governance Act, 2006
(Act No. 2 of 2006), will be the sole beneficiary of the loan. Namport has operated as the
National Port Authority in Namibia since 1994, and manages the Port of Walvis Bay, the Port
of Lüderitz, and a Syncrolift (dry dock facility). Under the terms of the Namibian Ports
Authority Act, 1994, Namport has, in addition to the specific powers vested in it under the
Act, all the powers that may be exercised by a company under Namibia’s Companies Act.
These powers include, among others, the power to enter into contracts, including contracts
outside of Namibia, and the power to borrow.
4.1.2 Namport has a two-tier governance structure consisting of the Board of Directors and
the executive management. The Minister of Works and Transport appoints Namports’s Board
of Directors. The Board of Directors has overall responsibility for the affairs of Namport. The
Board comprises five independent non-executive directors whose terms of office are three
years each. The Board of Directors appoints a Chief Executive Officer (CEO) on a five-year
contract that is renewable at the discretion of the Board. The CEO is responsible for the
execution of strategy and management at Namport, and is assisted by members of senior
management. Under the State-owned Enterprises Governance Act, the Minister of Works and
Transport must enter into a Governance Agreement with Namport’s Board of Directors that
sets out the roles, responsibilities and obligations of the Ministry and Namport; the latest such
Governance Agreement was entered into on 20th
May 2010 for a period of five years.
4.1.3 The implementation arrangements for the Loan and the MIC TA Grant would be
separated whereby Namport would be the executing agency for all the project components
financed under the ADB Loan and the Walvis Bay Corridor Group (WBCG) would be the
executive agency for the component on logistics and capacity building financed under the
MIC TA Grant.
4.1.4 Namport has an existing structure comprising a Project Executive Steering Committee
(PESC) chaired by Namport’s CEO who oversee strategic decision making and report to the
Board of Directors. The Project Implementation Committee (PIC), headed by the Port
13
Engineer and Projects Manager is responsible for the day to day management and supervision
of project activities and report to the PESC. The PIC comprises Namport experts in all
disciplines for the project’s activities, supported by external consultants providing specialist
advisory service. The PESC and PIC already exist and most key appointments have been
made with the remaining positions expected to be filled prior to project commencement. The
Walvis Bay Corridor Group has experience in the implementation of DFI financed projects
and the Project Manager for Spatial Development Initiatives will head the implementation
unit for supervision of this project. The Ministry of Works and Transport and the Ministry of
Finance have identified focal persons who will be responsible for ministerial oversight and
support for this project.
Procurement
4.1.5 Procurement activities will be carried out by Namport and by the WBCG for project
components financed under the ADB Loan and the MIC TA Grant respectively.
4.1.6 The Procurement Unit in Namport is still in the formative stage as it is only 3 years
old and Namport is in the process of filling up the vacant positions. Given the complexity of
the current EPC tender for the port expansion project (detailed below), a specialized team of
consultants have helped Namport to design the EPC procurement process and is currently
carrying out the evaluation. The consultants work under the supervision of the Project
Executive Steering Committee with recommendations presented to the Namport Board for
final decision at each stage.
Procurement for the EPC Works Contract to Construct the New Container Port Terminal
4.1.7 The procurement action for the expansion of the container terminal was initiated in
September 2012. At that time, Namport and the Government of Namibia expected project
financing to be arranged by the bidders though finance from development financial
institutions was also being contemplated. It did not appear that, at that time Namport had any
intention of seeking financing from the African Development Bank and therefore had no
reason to follow the Bank’s procurement policies and procedures. The situation changed when
the identification mission from the Bank visited them in December 2012 and they were made
aware of the more attractive conditions (including loans in ZAR) that the Bank was offering.
Namport and the Government of Namibia then approached the Bank to provide finance to the
extent of almost 87.6% of the cost of the project.
4.1.8 Invitations to bid for this procurement were locally and internationally advertised in
the print media and online on the Namport website. The bids were received on 18th February
2013 and are under evaluation. The bidding process has gone through stringent diligence
including a mandatory pre-bid meeting and site-inspection by the bidders. The questions from
the bidders were promptly answered.
4.1.9 The current situation that Namport is facing is unprecedented- the Bank’s support has
been requested for an important para-statal midway through a large and nationally (and
regionally) critical project and the Bank has had no major previous engagement in the country
for large investment lending in this sub-sector. The project is already delayed and the
Authorities have made a compelling case that re-launching of the tender will be very costly
for Namport and Namibia.
4.1.10 As the GoN and Namport have requested the Bank to finance a procurement that has
not been conducted using the Bank’s Procurement Rules, the Bank undertook independent
reviews and due diligence of the procurement process to ascertain if the procurement is likely
to meet global industry standards and the Bank’s procurement principles. For this purpose, the
Bank commissioned two independent procurement consultants to support Bank Procurement
Specialists in carrying out the due diligence. The review has concluded that while the
14
procurement process was rigorous and detailed, and did not appear to deliberately favor any
bidder or set of bidders, there were departures from the Bank’s procurement principles. (Some
of the deviations included (i) Namibian dollars as the payment currency irrespective of the
nationality of the bidder;(ii) the contract prices being fixed despite the contract period being
three years; (iii) bid-evaluation that allowed Namport to use unspecified criteria if it felt it was
in its best interest; (iv) bespoke contract provisions that transferred significant risks to
contractors; (v) commercial arbitration to take place in Namibia and not in a neutral place.
4.1.11 The Walvis Bay expansion project has evident economic benefits for the region and
timely completion of the project is key for such benefits to be realized. The preferred
alternative (of the Bank) of rebidding of this procurement would mean a delay of many
months in the commissioning schedule for the project. This would have serious and
unacceptable impact on the economy of Namibia and the region and is not acceptable to
Namport and the Government of Namibia. A flexible and pragmatic approach, may therefore,
be necessary for this first time engagement with Namport. It would, therefore, appear that
there might be merit to allow the present process to be completed as started and to ask for
modifications in some key contractual provisions to include Bank’s rights with respect to
Fraud and Corruption and for the Bank’s right to audit.
4.1.12 Given on the need to speedily execute the above project and the diligence to ensure
that the contractors and subcontractors who would be awarded the contracts are not debarred
or suspended at the time of contract award or signing, and the incorporation of F&C and
Audit Rights provisions in the contracts before signature, Board approval is sought to grant a
waiver from the application of the Bank’s Procurement Rules and to approve to finance the
EPC works contract for construction of the new container terminal at Walvis-Bay to be
awarded by Namport using a bespoke procurement process and contract. This waiver is being
sought only for the EPC works contract.
Procurement of equipment, ancillary services and logistics and capacity building
4.1.13 With the exception of the EPC main works contract, the procurement of all project
components namely: equipment, ancillary services and logistics and capacity building support
will be done in accordance with the applicable Bank’s Rules and Procedures for the
procurement of Goods and Works and the Bank’s Rules for the use of Consultants. The
details of the procurement arrangements are summarised in the technical annex.
Financial Management
4.1.14 The Project loan’s financial management will be implemented by Namport within its
existing set-up for project implementation under the overall management of the Board of
Directors whereas WBCG will be responsible for the Grant. An assessment of Namport’s and
WBCG’s financial management arrangements for the implementation of the project (which
included a review of the budgeting, accounting, internal controls, flow of funds, financial
reporting and auditing arrangements) indicates that they satisfy the Bank’s minimum
requirements to ensure that the funds made available for the financing of the project are used
economically and efficiently and for the purpose intended. In addition, internal and external
audit requirements are further measures towards effective corporate governance.
4.1.15 In accordance with the Bank’s reporting and auditing requirements, Namport and
WBCG will be required to submit Quarterly Progress Reports (within 30 days after the end of
each quarter) and annual audit reports with financial information for the Loan and Grant
respectively. Furthermore, separate annual audit reports with financial information (with the
audit done in accordance with a Bank approved audit ToR) will be prepared by the respective
implementing entities in compliance with their internal legal requirements. The audit costs
will be borne by the respective implementing entity and the audit reports together with the
15
auditor’s management letter indicating any weakness in internal control including the
responses from management will be sent to the Bank within six (6) months of the end of the
respective fiscal year. (A draft audit TOR that can be used as a guide has been availed to
Namport). In addition, Namport’s annual audited financial statements will also be submitted
together with the project audit report and the project management letter.
Disbursement Arrangements
4.1.16 The Loan will be disbursed for two categories of expenditure including Works and
Goods with a provision for future consulting services, if any. The MIC TA Grant will be
disbursed for two categories of expenditure including Goods and Services. The Direct
Payment and Reimbursement Guarantee Methods will be used as payment method under the
ADB loan and the Special Account method will be applied for the MIC TA Grant.
Disbursements under the Loan and Grant would be made in accordance with the list of goods,
works and services and the Bank’s rules and procedures as laid-out in the Disbursement
Handbook insofar as may be applicable.
4.2 Monitoring
4.2.1 The outline of the project implementation schedule takes into account the relevant
experience of the PIC and WBCG in managing works implementation deadlines and that of
the Bank in processing previous similar projects. According to the estimates, project activities
will start (upon approval of the loan and grant) in the last quarter of 2013 and end towards the
end of 2016. The grant and loan closing dates are scheduled for end of 2017 and 2019
respectively. At the level of the Bank, the activities planned following loan and grant approval
will be closely monitored, in accordance with the schedule in Table 4.1 below.
Table 4.1 : Schedule for Project Monitoring
Timeframe Milestone Monitoring process / feedback loop
Q4 – 2013 Project Launching Field Mission, Progress Reporting
Q2 – 2014 Construction start + 6 months Field Mission, Progress Reporting
Q4 – 2014 Construction + 14 months Field Mission, Progress Reporting
Q2 – 2015 Construction start + 20 months Mid-Term Review, Progress Reporting
Q4 – 2015 Construction start + 26 months Field Mission, Progress Reporting
Q2 – 2016 Construction start + 32 months Field Mission, Progress Reporting
Q4 – 2016 Construction start + 36 months Project Completion, Completion Report
Q4 – 2017 Defects Liability and end of 1st yr Project Evaluation, M & E Report
4.2.2 Apart from the schedule for monitoring activities, the PIC will regularly provide the
Bank with quarterly project progress reports covering all project activities including
implementation of the ESMP and the status of the log-frame indicators, annual audit reports
as well as the final project report; all in the Bank’s standard format. The comprehensive
ESMP and other actions in the E&S Action Plan will be implemented by Namport (by the
Environmental Manager and Officer) and the selected contractor (by Environment, Health and
Safety, Fire and Waste Management Officers). The Ministry of Environment and Tourism as
the ESIA licencing authority will monitor environmental and social performance on the basis
of the required ESMP compliance reports. Project monitoring will be carried out by the
Bank’s supervision missions, in line with the Bank’s Operations Manual.
16
4.3 Governance
4.3.1 Namibia has consistently ranked among the top African countries on good
governance. The country has consistently scored at least 4 out of 5 in all the categories of
Bank Group’s Country Policy and Institutional Assessment (CPIA), with the exception of
property rights and rule based governance. In addition, Namibia has been ranked: i) between
the 50th-75th percentile out of the 212 countries by the World Bank’s 2011 Worldwide
Governance Indicators; ii) 6th out of 53 African countries, with an overall score of 67.3 out of
100, by the 2010 Mo Ibrahim Index of African Governance; and iii) 4th and 5th least corrupt
country in Southern Africa and SSA, respectively, by the 2010 Corruption Perception Index
by Transparency International.
4.3.2 Namport has adopted the principles of good corporate governance as contained in the
King Report 2009 (“King III”). The Authority is overseen, managed and controlled by a
Board of Directors on behalf of the government and has overall responsibility and
accountability for the affairs and performance of the Authority. The Authority’s Board is
appointed by the portfolio Minister of Works and Transport (MWT) who has the overall
responsibility for policy and regulation, and the Ministry of Finance who has an oversight role
in Namport’s financial and project development activities. The specific governance risk
mitigation measures of the present project include: (i) the appointment of financial and
technical audit firms to ensure that funds are used efficiently and for the intended purposes;
(ii) Bank prior review and approval of all project procurement activities; and (iii) the use of
direct disbursement methods to channel project funds to contractors and service providers.
4.4 Sustainability
The expansion of the port is expected to be a long-term self-sustaining economic
activity that generates sufficient financial return to cover all operating costs, taxes,
maintenance expenses, and repayment of debt and recovery of capital costs. While regular
maintenance costs for both terminals are planned to be funded by operating cash flows, the
business plan for the new terminal explicitly makes a provision for a Maintenance Reserve
Account (MRA) that will be accumulating the necessary amount of funds for equipment
replacement and purchases of additional equipment. The accumulation of funds will be spread
over five years prior to the expected time of maintenance activities, which minimizes the risk
of dependency on cash flows of a single year. Table 4.2 presents the actual, past and projected
maintenance costs, for the existing and the new terminal. It is noted that the same trend of
maintenance expenditures is expected to continue.
Table 4.2 : Historic and Projected Terminal Maintenance Costs
Actual Projection
Maintenance costs 2009 2010 2011 2012 2016 2017 2020 2025 2030
Existing terminal 24 34 29 32 42 44 53 71 95
New terminal N/A N/A N/A N/A 27 114 137 214 286
Revenue 616 566 647 755 1,046 1,418 2,030 3,118 4,239
Operating costs 280 344 362 465 701 865 1,063 1,447 1,909
Assets 2,031 2,288 2,879 2,606 5,553 5,355 6,002 9,395 16,372
As % of revenue 3.8% 6.0% 4.5% 4.3% 6.6% 11.2% 9.3% 9.1% 9.0%
As % of operating
costs 8.4% 10.0% 8.1% 6.9% 6.0% 5.1% 5.0% 4.9% 5.0%
As % of assets 1.2% 1.5% 1.0% 1.2% 0.8% 0.8% 0.9% 0.8% 0.6%
17
4.5 Risk management
4.5.1 The successful implementation of the project and achievement of its development
objectives predicates on several assumptions, each of which may constitute a potential risk:
4.5.2 Risk posed by competing Routes and Ports: The risk of competing ports and corridors
in the region taking over transhipment and transit trade from the Port of Walvis Bay is
mitigated through: i) comprehensive analysis of the competition and market trends and
development of sound strategies to meet the planned objectives; ii) the Government and
Namport consolidating efforts to develop the entire transport and logistics chain and soft
issues to enable safe and efficient transport through the Walvis Bay corridors and across the
borders; iii) appointment of the Walvis Bay Corridor Group to promote the corridors and
spearhead tri-partite agreements and partnerships, to foster closer collaboration and promote
the use of the Walvis Bay port and corridors. These initiatives are already yielding positive
results translating to increased trade volumes and motivating further efforts by the country.
4.5.3 Risk of Government failure to implement its infrastructure development plans that
complement the project: The Government of Namibia is committed to its development plans
in NDP4 and has developed a detailed action plan for implementing these initiatives and
allocated the budget to commence the implementation of these actions. It has also
incorporated Monitoring and Evaluation on a periodic basis to inform on progress. In
addition, the Bank is providing support through a MIC TA Grant.
4.5.4 Risk of an adverse regional logistics environment: Road transport operators need
workable access to other countries regionally. If non-tariff barriers hinder operations too
much, transport rates may be increased and the overall competitiveness of the corridors may
be compromised. As mitigation measure the Project will support the Walvis Bay Corridor
Group, which will increase the capacity to deal with these problems.
4.5.5 Risk of procurement delays and late project start up: in order to avoid delays due to
procurement, the project has opted for advanced procurement for the main terminal
construction as well as EPC contract for the main civil works to avoid separate procurements
for design and construction gaining almost 12 months in the procurement timeline.
4.5.6 Construction risks (including technical risks, delays and cost overrun): the selection
process for contractors ensures that only skilled and specialised companies with sufficient
capacity and financial standing are awarded this contract and the use of a fixed price lump
sum contract with a defined completion date will mitigate against cost overrun and delays.
The dedicated Project Implementation Unit constituting various experts for project control
and supervision as well as a Bank supervision team for monitoring of project progress also
builds on mitigating against construction risks.
4.5.7 Environmental and social risks: The comprehensive ESMP and the E&S Action Plan
will be implemented and monitored by the E&S specialists of Namport, authorities and the
selected contractor. The Bank’s task team will follow up on a periodic basis. In addition, the
Bank’s decentralization strategy will also have positive impact in assisting the Executing
Agency.
4.6 Knowledge building
4.6.1 The project provides an excellent opportunity for new skills to be developed both
within the Bank and in Namibia. Within the Bank, it is an opportunity to further strengthen its
knowledge on ports and regional integration which will feed into the Bank’s knowledge
series. At Namport level, the project incorporates specialised training which helps to build the
skills-base of the company. The project has influence to build-up local capacity through
employment of nationals for skilled and unskilled jobs related to the project’s activities.
18
4.6.2 The logistics master plan will provide a comprehensive logistics policy and system
development plan for Namibia with the target year of 2030 that will be a shared vision and
common implementation platform for the public and private sectors. Freight forwarders are
often the “one-stop-shop” interface between shipping lines, customs and road carriers. It is
therefore important to ensure that the professional competence of the industry is up-to-date
and meets customers’ requirements. The Project will address this by organizing FIATA
training particularly for female in-service freight forwarders and persons who intend to enter
this business.
V - LEGAL INSTRUMENTS AND AUTHORITY
5.1 Legal instrument
The Bank instruments to finance this project are:
(i) a loan agreement between Namport and the Bank for a loan to Namport with a
sovereign guarantee provided by the Republic of Namibia,
(ii) a guarantee agreement between the Republic of Namibia and the Bank, and
(iii) a letter of agreement between the Republic of Namibia and the Bank for a MIC
Technical Assistance Fund Grant to the Republic of Namibia.
5.2 Conditions associated with Bank’s intervention
5.2.1 Conditions Precedent to the Entry into Force of the ADB Loan Agreement &
Guarantee Agreement: The Loan Agreement and the Guarantee Agreement shall enter into
force upon signature by the parties thereto in accordance with the provisions of Section 12.01
of the General Conditions Applicable to the African Development Bank Loan Agreements
and Guarantee Agreements (Non Sovereign Entities).
5.2.2 Conditions Precedent to the Entry into Force of the MIC Grant Letter of
Agreement: The Letter of Agreement shall enter into force upon signature by the parties
thereto.
5.2.3 Conditions Precedent to First Disbursement of the ADB Loan: The obligation of
the Bank to make the first disbursement of the Loan shall be conditional upon:
(i) entry into force of the Loan Agreement and the Guarantee Agreement in accordance
with Section 5.2.1 above and
(ii) fulfillment by the Borrower and Guarantor of the provisions of Section 12.02 of the
General Conditions.
5.2.4 Conditions Precedent to First Disbursement of the MIC Grant: The obligation of
the Bank to make the first disbursement of the MIC Grant shall be conditional upon:
(i) entry into force of the Letter of Agreement in accordance with Section 5.2.2 above and
the fulfillment, in form and substance satisfactory to the Bank, of the following
conditions:
(ii) a United States Dollar special account (the “Special Account”) has been opened in a
bank acceptable to the Bank for receipt of the proceeds of the Grant;
(iii) entry into force of the Loan Agreement between the Namibian Ports Authority
(Namport) and the Bank and the Guarantee Agreement between the Recipient and the
Bank for the New Port of Walvis Bay Container Terminal Project;
(iv) the Recipient providing the Bank with the names of the person(s) authorized to sign
withdrawal applications for the Grant on behalf of the Recipient together with
authenticated specimen signatures of each such designated person.
19
5.2.5 Other Conditions of the Loan:
(i) The Borrower shall, not later than 30th
September 2013, submit to the Bank each item
listed under the Environment and Social Action Plan set forth as annex V hereto, each
in form and substance satisfactory to the Bank;
(ii) The Borrower shall, within one (1) month of the closing of each budget cycle
commencing with its 2012-2013 budget and throughout the duration of the Project,
provide evidence in form and substance satisfactory to the Bank of the annual
budgetary allocation for the Namport contribution to project financing;
(iii) The Borrower shall, within three (3) months of the signing of this Agreement, provide
evidence in form and substance satisfactory to the Bank that the grant to the Borrower
from the Guarantor has been duly concluded, together with evidence of annual
budgetary allocations on the part of the Guarantor for such grant amount.
5.2.6 Undertakings:
(i) implement, and report to the Bank on a semi-annual basis in a form acceptable to the
Bank, on the implementation of the comprehensive Environmental and Social
Management Plan;
(ii) inform the Bank of any significant environmental and social incidents within ten (10)
days of their occurrence and, within thirty (30) days of such occurrence, provide
details on corrective actions which the Borrower will implement to address each such
incident;
(iii) maintain (a) the Project Implementation Committee with terms of reference,
composition and a Project Manager acceptable to the Bank and (b) the Project
Executive Steering Committee with terms of reference and composition acceptable to
the Bank;
(iv) incorporate the Bank’s standard provisions on Fraud and Corruption and Audit Rights
in the EPC works contract for the construction of the new terminal prior to its
signature with the successful bidder; and
(v) promptly notify the Bank of any material modifications to the EPC works contract.
5.3 Compliance with Bank Policies
This project complies with all applicable Bank policies except for the waiver being
requested for the EPC main works contract.
VI - RECOMMENDATION
6.1.1 Management recommends that the Board of Directors approve:
(i) the proposed loan of ZAR 2,982 million to Namibia Ports Authority (Namport), with
the guarantee of the Republic of Namibia for the purposes and subject to the
conditions stipulated in this report; and
(ii) the proposed MIC Technical Assistance Fund grant of UA 1.00 million to the
Republic of Namibia for the purposes and subject to the conditions stipulated in this
report; and
(iii) a waiver from application of the Bank Group’s Rules and Procedures for Procurement
of Goods and Works solely with respect to the EPC main works contract for the
construction of the new terminal which was procured using a bespoke procurement
process and contract adopted by the Borrower.
Indicator Year Namibia AfricaDeveloping
Countries
Developed
CountriesCharts
Basic Indicators
Area ('000 Km²) 824.3 30,046.4 80,976.0 54,658.4
Total Population (millions) 2012 2.4 1,068.4 5,628.5 1,068.7
Urban Population (% of Total) 2012 39.2 40.8 44.8 77.7
Population Density (per Km²) 2012 2.8 34.5 66.6 23.1
GNI per Capita (US $) 2010 4,500.0 1,548.9 2,780.3 39,688.1
Labor Force Participation - Total (%) 2012 40.3 37.8 0.0 0.0
Labor Force Participation - Female (%) 2012 46.2 42.5 39.8 43.3
Gender -Related Development Index Value 2007 0.7 0.5 .. 0.9
Human Develop. Index (Rank among 169 countries) 2012 128.0 3,972.0 .. ..
Popul. Living Below $ 1 a Day (% of Population) 2004 31.9 158.1 25.0 ..
Demographic Indicators
Population Growth Rate - Total (%) 2012 1.7 2.3 1.4 0.7
Population Growth Rate - Urban (%) 2012 3.3 3.4 2.4 1.0
Population < 15 years (%) 2012 35.5 40.0 29.2 17.7
Population >= 65 years (%) 2012 3.8 3.6 6.0 15.3
Dependency Ratio (%) 2012 64.8 77.3 52.8 ..
Sex Ratio (per 100 female) 2012 98.9 100.0 934.9 948.3
Female Population 15-49 years (% of total population) 2012 26.0 48.6 53.3 47.2
Life Expectancy at Birth - Total (years) 2012 62.6 58.1 65.7 79.8
Life Expectancy at Birth - Female (years) 2012 63.0 59.4 68.9 82.7
Crude Birth Rate (per 1,000) 2012 25.4 34.2 21.5 12.0
Crude Death Rate (per 1,000) 2012 8.2 10.9 8.2 8.3
Infant Mortality Rate (per 1,000) 2012 30.4 70.8 53.1 5.8
Child Mortality Rate (per 1,000) 2012 40.6 111.3 51.4 6.3
Total Fertility Rate (per woman) 2012 3.1 4.3 2.7 1.8
Maternal Mortality Rate (per 100,000) 2010 200.0 402.3 440.0 10.0
Women Using Contraception (%) 2012 57.1 31.6 61.0 75.0
Health & Nutrition Indicators
Physicians (per 100,000 people) 2010 37.4 53.6 77.0 287.0
Nurses (per 100,000 people)* 2007 277.5 905.0 98.0 782.0
Births attended by Trained Health Personnel (%) 2007 81.4 1,472.2 39.0 99.3
Access to Safe Water (% of Population) 2010 93.0 65.7 84.0 99.6
Access to Health Services (% of Population) 2000 59.0 65.2 80.0 100.0
Access to Sanitation (% of Population) 2010 32.0 39.8 54.6 99.8
Percent. of Adults (aged 15-49) Living with HIV/AIDS 2011 13.4 4.6 161.9 14.1
Incidence of Tuberculosis (per 100,000) 2011 723.0 234.6 .. ..
Child Immunization Against Tuberculosis (%) 2011 89.0 81.7 89.0 99.0
Child Immunization Against Measles (%) 2011 74.0 76.6 76.0 92.6
Underweight Children (% of children under 5 years) 2007 17.5 63.6 27.0 0.1
Daily Calorie Supply per Capita 2009 2,151.0 2,568.8 2,675.2 3,284.7
Public Expenditure on Health (as % of GDP) 2010 6.8 5.9 4.0 6.9
Education Indicators
Gross Enrolment Ratio (%) .. .. .. ..
Primary School - Total 2010 106.8 101.9 106.0 101.5
Primary School - Female 2010 106.1 98.1 104.6 101.2
Secondary School - Total 2007 64.0 42.3 62.3 100.3
Secondary School - Female 2007 69.3 38.5 60.7 100.0
Primary School Female Teaching Staff (% of Total) 2010 68.2 43.7 .. ..
Adult Literacy Rate - Total (%) 2010 88.8 67.0 19.0 ..
Adult Literacy Rate - Male (%) 2010 88.5 58.3 .. ..
Adult Literacy Rate - Female (%) 2010 89.0 75.8 .. ..
Percentage of GDP Spent on Education 2010 8.3 5.3 .. 5.4
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2011 1.0 8.4 9.9 11.6
Annual Rate of Deforestation (%) 2000 0.9 0.6 0.4 -0.2
Annual Rate of Reforestation (%) .. .. .. ..
Per Capita CO2 Emissions (metric tons) 2009 1.6 1.2 .. ..
Last update: April 2013
Namibia
Comparative Socio-Economic Indicators
Sources : ADB Statistics Department Databases; World Bank: World Development Indicators
UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports.
Note : n.a. : Not Applicable ; … : Data Not Available.
0
1000
2000
3000
4000
5000
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
GNI per Capita (US $)
Namibia Africa
0
0.5
1
1.5
2
2.5
201
0
201
1
201
2
Population Growth Rate - Total (%)
Namibia Africa
0
10
20
30
40
50
60
70
80
90
100
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
Access to Safe Water (% of Population)
Namibia Africa
0
20
40
60
80
100
120
140
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
Secondary School - Total
Namibia Africa
Appendix I. Country’s comparative socio-economic indicators
Appendix II. Table of ADB’s Portfolio in the Country
Project Name Main
Sector
Window Approval
Date
Disburse
Deadline
Amount
Approved
(UA m)
Amount
Disbursed
(UAm)
Disbursed
Rate
(%)
Support to Aquaculture
Development
Agriculture
(OSAN)
MIC
Fund 05.06.09 30.05.12 0.26 0.26 99.2
Namibia Airport Study Transport
(OITC)
MIC
Fund 20.07.10 31.12.12 0.59 0.08 13.1
Human Resources
Development Plan
Institutional
Support
(OSHD)
MIC
Fund 09.10.09 31.03.12 0.60 0.54 89.5
Statistical Capacity Building
(SCB-II)
Institutional
Support
(ESTA)
MIC
Fund 07.07.11 31.12.13 0.49 0.00 0.00
TRUSTCO Finance
Private
Sector
(OPSM)
Private
Sector 07.12.12 TBD 4.8 3.29 68.5
MIC Grant Application
for Establishment of the
National Medical Benefit
Fund
Health
(OSHD)
MIC
Fund 12.03.12 31.12.13 0.50 0.00 0
Total 7.24 4.16 57.5%
Appendix III. Key Projects financed by the Bank and other DP in the country
Table Summarising Grants
Development
Partner
Subsectors/Programmes Commitments for
2011/2012 (N$) China Aquaculture, Construction, Equipment, Defence, Capacity building & Health 132,752,400.00
France Social Development Fund, Decentralization, ICT, Culture, Governance 5,374,469.38
Germany National Parks, Community Forest, Land Reform, Water Resource Management,
Environment and tourism, Education, Capacity Building, Roads, Transport,
Public Finance Management, HIV/AIDS
425,014,800.00
Spain Fishery, Health, Water, Education, Disaster Management & HIV/AIDS 55,216,179.00
Sweden Human rights and Democracy, Environment and Climate, Gender Equality and
Economic Growth
35,790,045.69
USA USAID, MCA, PEPFAR, Health, Education, Environment 401,808,861.00
Multilateral UN Agriculture, Housing, Education & Training, Safety & Security, Gender Equality
& Women Employment, Child Protection & Welfare, Health, Tourism,
Emergency Preparedness and Impact Mitigation, Immigration and Refugees
Affairs, Social Development, Governance, Skills Transfer and Capacity
Development, and Environment.
91,685,175.00
European
Union
Water Supply & Sanitation, Parliamentary Support Programme, Performance
Management System, Public Finance Management Programme, Rehabilitation of
Roads in the North, MDG Initiative, Civil Society Capacity Building Programme
256,161,168.00
World Bank Namibia National Statistical System, National Integrated Resource Plan, Namibia
Crisis Management Plan, Corridor Facilitation Programme, Open Africa North
South Tourism Corridor
20,130,273.09
GRAND TOTAL 1,423,933,371.16
Table Summarising Concessional Loans
Development
Partner
Subsectors / Programmes Commitments for
2011/2012 (N$)
China Construction 177,680,000.00
Finland Fisheries 320,000,000.00
Germany Transport, Finance, Energy 285,207,300.00
Japan Transport 343,096,716.53
TOTAL 1,125,984,016.53
Appendix IV. Map of the Project Area
Annex I
I. REVIEW OF COUNTRY PARAMETERS FOR ELIGIBILITY FOR BANK FINANCING
1.1 Country’s Commitment
Has the Government demonstrated willingness to participate in project financing by efficiently
mobilizing Counterpart Funding?
Yes. The Government is providing: i) a Sovereign Guarantee against the ADB loan to Namport and
ii) providing a grant to the project of 250 million NAD (7.3% of total project cost).
Is the Government interested and actively involved in the implementation of the project?
Yes. Namport is under the purview of the Ministry of Works and Transport and its board is
appointed by the Minister and regularly reports to him. The project also includes a component on
logistics and trade facilitation funded by a Bank MIC TA Grant. This activity will involve different
government stakeholders including the National Planning Commission and Ministry of Works and
Transport during project implementation.
Is the project in a sector of priority under the Poverty Reduction Strategy?
Yes. The development agenda of the Government is contained in the Fourth National Development
Plan (NDP4), covering the period 2012/13-2016/17. NDP4 has identified logistics, as one of the
economic priorities and the Walvis Bay Port Expansion Project is clearly identified as one of the
national priorities under the Logistics pillar.
Has there been progress in achieving the Poverty Reduction Strategy objectives?
Yes. Namibia has made significant progress in addressing many development challenges. Access to
basic education, primary health care services, and safe water is high and growing. Sound public
policies are helping to lay the foundation for gender equality. Namibia maintains social safety net
programs for the elderly, disabled, orphans, vulnerable children, and war veterans, and has enacted a
Social Security Act that provides for maternity leave, sick leave, and medical benefits to Namibians.
Although Namibia is on track to meet the Millennium Development Goals on education,
environment and gender, the severity of the HIV/AIDS epidemic is frustrating efforts to meet the
Millennium Development Goals (MDGs) to reduce child mortality (MDG4), improve maternal
health (MDG5), and combat HIV/AIDS, malaria and other diseases (MDG6).
1.2 Country’s Financial Allocation to Sector
Is the country’s public expenditure allocation giving high priority to the sector concerned?
Yes. The Government has in the past few years allocated between 8%-10% of the national budget to
the transport sector. The sector is allocated NAD8.2 billion over the Medium-Term Expenditure
Framework covering the period 2011/12-2013/14 for, among others:- expansion of the port of
Walvis Bay, rehabilitation and railway infrastructure management, and development and
maintenance of national roads infrastructure.
1.3 Country’s Debt Level and Budget Situation
Can the country sustain additional debt and how is the current debt being managed?
The authorities project total debt stock to remain at about 27% of GDP in 2012, below Namibia’s
35% statutory debt-to-GDP threshold. Namibia’s debt levels remain sustainable, and can therefore
sustain additional debt. For Namport, an analysis on its capacity to borrow for this project shows
high debt service coverage ratios (DSCRs). For the existing loans that fully mature in 2018, the
average DSCR is 2.02x while the minimum is 1.30x. For the new loan, the average DSCR is 3.55x
and the minimum is 1.82x. The project is self-sufficient in debt servicing and no additional debt
burden is expected to fall on the government.
To what extent is the Government receiving co-financing from other donors?
Many bilateral donors scaled down their support to the country following its classification as an
upper MIC. The level of co-financing from donors is not significant relative to the national budget.
Annex II
II. NAMIBIA - COUNTRY OUTLOOK
General Overview
Namibia is a middle income country that has enjoyed considerable successes since it gained independence
from South Africa in 1990 resulting from sound economic management, good governance, basic civic
freedoms, and respect for human rights. Namibia inherited a well-functioning physical infrastructure, a
market economy, rich natural resources, and a relatively strong public administration. The country also
inherited extreme social and economic inequities, however, which have left Namibia with a highly dualistic
society. Namibia’s per capita income of US$4,700 (2011, Atlas method) places it in the World Bank’s
upper-middle income grouping. However income distribution is among the most unequal in the world, with
a Gini coefficient estimated at 0.5971 by the latest (2009/10) household survey. Poverty incidence is high,
although it has declined somewhat during the past decade: 29% of individuals had consumption below the
national poverty line in 2009, compared to 69% in 1993.2
Economic Overview
Namibia’s economy is closely linked to South Africa’s economy through trade, investment, and common
monetary policies. The Namibian dollar is pegged to the South African rand, making economic trends
(including inflation) closely follow those in South Africa. The Namibian economy slowed down in 2011
with a GDP growth rate of 3.8%3, down from 6.6% in 2010, reflecting modest performances in mining and
agricultural activities. Prospects for the medium-term remain favourable with GDP growth projected to
continue on its path of recovery to an average of 4.2 percent for the years 2012 and 2013, driven by
construction, livestock and crop farming, manufacturing and mining. After years of fiscal surpluses arising
from prudent macroeconomic policies, the fiscal situation has deteriorated substantially, reflecting the
global economic crisis and expansionary policies to support growth. The budget for 2011/12 provides for
the continuation of the expansionary fiscal policy for the fourth successive year as the Government
commences the implementation of the three-year Targeted Intervention Programme for Employment and
Economic Growth (TIPEEG), totaling 14.7 billion Namibian dollars (NAD), aimed at creating and retaining
104, 000 jobs. As a result, the fiscal deficit is expected to widen, averaging nearly 6.5% of GDP between
2011/12 and 2012/13. The deficit is financed by domestic borrowing and foreign debt. Namibia’s debt
levels have risen in recent years, but remain sustainable and below the 30% threshold, despite the
expansionary fiscal policy.
Development Plans
In July 2012, the GRN launched the Fourth National Development Plan (NDP4), which will guide policies
through 2017. Economic growth, job creation, and increased income equality are the three overarching
objectives of NDP4. It proposes to achieve these objectives through industrial policies to stimulate growth
in tourism, regional trade logistics, agriculture and manufacturing (primarily through greater processing of
primary commodities). Reducing extreme poverty and improving education, health, infrastructure, and the
business environment enter into NDP4 as “basic enablers” that support the economic priorities. NDP4
presents ten “desired outcomes,” each accompanied by an indicator for measuring attainment of the
outcome, broad strategies expected to achieve the outcome, and a ministry that will serve as the champion.
This selectivity stands are in stark contrast to previous NDPs, whose agendas spanned the entire public
policy space.
2 World Bank Country Overview – Namibia 2013
3 African Economic Outlook – Namibia 2012
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Annex III
III. THE WALVIS BAY PORT
Ports and maritime in Namibia
Namport operates as the National Port Authority in Namibia since 1994 and manages both the Port of
Walvis Bay and the Port of Lüderitz in Namibia. The Port of Walvis Bay is situated at the west Coast of
Africa and provides an easier and much faster transit route between Southern Africa, Europe and the
Americas. The Port of Walvis Bay is Namibia's largest commercial port, receiving approximately 3,000
vessel calls each year and handling about 5 million tonnes of cargo. The port has good port infrastructures
which can be ranked among the best in Africa; together with tariffs which are still competitive compared
with their main competitors. These enable Walvis Bay to take advantage of the congestion and poor
productivity in Eastern and Southern African Ports (Tanzania, Mozambique, Angola and to a lesser extent
South Africa).
Recent performance
Namport achieved a record throughput of containers in 2012 of more than 337,000 TEU’s4 and overall
cargo volumes exceeding the 6 million ton mark for the first time ever. Revenue concomitantly also
exceeded N$700 million. Namport has regained higher volumes per vessel and the number of container
vessels has plateaued at around 46 per month on average (annualised at 560). This is the maximum number
of vessels that can be handled at present.
Namport’s opportunity and key differentiator remains in the SADC region. The economic growth in the
region exceeds that of most traditional markets and is the key to the company’s sustainability. The
opportunity remains in expanding intra-regional trade which is currently well below potential due to poor
infrastructure, lack of harmonisation of trade policies and cumbersome border procedures. The appointment
of the Walvis Bay Corridor Group to spearhead the recently established tri-partite Walvis Bay – Ndola –
Lubumbashi Development Corridor is testimony to the commitment of Namibia’s neighbouring countries to
regional integration.
Nature of the Transhipment Business at Namport
A significant share of the traffic in Walvis Bay is transhipment traffic (constituting 60% of container traffic)
particularly to / from ports in western and central Africa (including Angola) and transit traffic to/from
neighbouring countries (mainly South Africa and Angola) constitutes 34% of total shipments. The main
trading partner for imports are China (34%), Germany (16%) and USA (4%) and exports Spain (27%),
4 Namport Annual Report 2012
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China (11%), Germany and UK (7% each). Transshipment traffic has grown from 92,000 TEUs in 2006 to
218,000 TEUs in 2012 with an average annual growth rate (AAGR) of 55%. Transit traffic has also grown
over the same period from 25,000 TEUs to 65,000TEUs with AAGR of 25%. Some of the capacity issues
that Namport experience are largely a result of the increasing transhipment business. Transhipment demand
relates to a broader, regional market and in Namport’s case to the development of the countries to the north
of Namibia, right up to Ghana in West Africa. It is a function of the hub-and-spoke distribution model,
employed increasingly by the large international shipping lines.
African Shipping Activity
There are 24 container liner shipping operators in the West Coast of Africa region. This trade is dominated
by 3 large shipping lines: Maersk, CMA CGM and MSC in order of their respective share of trade capacity.
Combined, they offer 73% of all trade capacity in this region with Maersk and CMA CGM being the most
dominant. These 24 shipping lines operate 71 services to-and-from the region with a calculated trade
capacity of 3 656 000 TEU’s annually. The largest carrier by trade capacity is Maersk with 38% market
share.
i) This region is further separated into service types of:
ii) West Africa – Far East
iii) West Africa – Middle East / Indian Subcontinent
iv) West Africa – Southern Africa
It is in the latter region that Walvis Bay dominates. Walvis Bay and Cape Town account for 80% of the
region’s trade capacity. This goes some way towards explaining Namport and Walvis Bay’s rapid
improvement in another important shipping index: Liner Shipping Connectivity Index. In the past 7 years,
Namibia has improved from position 102 (out of 148 countries surveyed) to position 75. That is the same
positioning as countries like Kenya and Tanzania that enjoy centuries’ old trade routes
Competing Ports
Walvis Bay port has good port infrastructures which can be ranked among the best in Africa together with
tariffs which are still competitive compared with their main competitors. This enables the port to take
advantage of the congestion and poor productivity in Eastern and Southern African Ports (Mozambique,
Angola and to a lesser extent South Africa) and position itself as a transhipment port whilst also competing
for transit traffic with the other ports in the region. Out of South Africa’s eight ports, two are likely
competitors for Namibian ports, namely, Durban (for the traffic generated by the Gauteng province via the
trans-Kalahari) and Cogea for the transhipment traffic. The ports of Luanda, Lobito and Namib are
Angola’s main ports but considered not to pose significant threat in the short term due to its obsolete
infrastructure and inefficiencies (40 days waiting before berthing has been reported). A market study
conducted by Nathan Associates on the competing ports in the region has shown Walvis Bay’s potential to
become a regional hub port if it takes advantage of its current window of opportunity to expand and capture
the rising market demand whilst the government provides the complementary support of hard and soft
infrastructure. Other ports considered include the ports of Lagos/Apapa, Dar es Salaam Port, Port of Cape
Town, Port Elizabeth and Port of East London. Whereas some of these ports mostly serve local
import/export or transit, Walvis Bay is mainly focusing on transhipment cargo whilst also promoting the use
of its transport corridors to transit cargo for its landlocked neighbours and including the hinterlands of
Angola though the transcunene corridor. Although Cape Town is the closest South African port to Walvis
Bay and therefore could be considered its main competitor, it handles a very small volume of transshipment
and its capacity is limited.
The Walvis Bay Corridors and Group
The Walvis Bay Corridor Group is a public-private partnership established to promote the utilisation of the
Walvis Bay Corridors. This allows it to pool resources and authorities of both transport regulators and
transport operators, thus effectively serving as a facilitation center and one-stop shop coordinating trade
along the Walvis Bay Corridors and linking Namibia and its ports to the rest of the Southern African region.
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The Walvis Bay Corridor Group, is governed by a Board of Directors drawn from the different public and
private stakeholders within the transport and logistics sector. The Strategic focus and mandate of the WBCG
is: Business Development, Trade Facilitation, Infrastructure Development, Wellness service and Spatial
Development Initiatives (SDI’S) for the Walvis Bay Corridors
Logistics and Trade Facilitation
International comparisons show that, Namibia is one of the most efficient logistic environments of southern
Africa ranked 89th worldwide (and 3rd position in the SADC region in 2012) after South-Africa (ranked
24th) and Botswana (ranked 68th)). Many improvements have been made in the last few years on
infrastructures, logistics competences and customs facilitation. Logistics issues in Namibia relate more with
international than with domestic traffics. In this regard, Namibia promotes several international transport
corridors crossing the country mainly from the port of Walvis Bay. Since Namibian roads along these
transport corridors are still in relatively good condition, in particular as compared with African standards,
the main challenge is the improvement of cross-border facilitation procedures. Namibian authorities are
very proactive and significant progresses have been made to simplify and harmonize custom procedures.
The following main achievements and on-going projects must be mentioned:
A Single Administrative Document (SAD) has been adopted and is used on the trans-Kalahari corridor.
The development of a One-Stop Border Post (OSBP) is on-going on the main corridor (trans-Kalahari) as
a “pilot project”. It is planned to be operational in 2013 and it is contemplated that this system is
extended in the future to other border crossing on the trans-Cunene and trans- Caprivi.
Implementation of an electronic data exchange system between countries is under discussion and is
planned to be operational in 2013 at the OSBP between Namibia and Botswana.
The development of dry ports has started within the port of Walvis Bay. Even though the opportunity of
developing such dry ports within the perimeter of the port where there is a serious shortage of storage
areas, in particular for dry cargo, may be questionable, it is time now to take full benefit of these
facilities and to optimize their functioning.
Creation of the Walvis Bay Corridor Group (WBCG), a public and private sector collaboration, is aimed
to promote development of corridor infrastructure, businesses and trade facilitation, corridor best
practices and safe trade and transport corridors is continuing to yield results
Increasing presence in the region and internationally through WBCG regional offices in Lusaka,
Johannesburg, Lubumbashi and Sao Paulo is increasingly drawing businesses through the Walvis Bay
corridors;
Formulation of formal tripartite MoUs and partnerships on the Trans-Kalahari and Trans-Caprivi
corridors
The next steps forward include the following:
i) Increase volume and speed to maximize advantage:
Port of Walvis Bay becomes a regional hub port
Increase transportation capacity to inland (strengthen resource based bulk cargo)
Better trade facilitation (set up OSBP at all borders)
ii) Preparation for Strategic Master Plans for Logistics and Regional Urban Centres
iii) Global promotion of Walvis Bay to attract logistics/ distribution companies.
iv) Implementation of Development of Strategic Hubs
Development of logistics hubs based upon “National Logistics Master Plan”, further promotion of
trade facilitation (Single Window & Port Community System).
Development of regional urban centres based upon “Master plan on development of regional urban
centres” (Land Use Plan, Urban Infrastructure).
v) Diversification of Industries
Attract diverse industries due to excellent position as an international logistics hub.
Optimise growth of transit as well as transhipment traffic via the Port of Walvis Bay.
Annex IV
IV. PROJECT DESCRIPTION
New Terminal Construction:
The proposed project is the strategic expansion of the Walvis Bay Container Terminal that will see the
creation of 30 hectares of new land reclaimed from channel at Walvis Bay. The new reclaimed land will be
created by dredging/deepening the port and using the sand obtained from deepening to form the new land.
The reclaimed land will be linked to the existing port land by a causeway. A new modern container terminal
will then be built on top of the newly reclaimed land and will consist of quay walls, paved areas, buildings,
roads, railway lines, ship to shore quay cranes, rubber tired gantry cranes, etc. The new container terminal
will have a capacity of 650,000TEU p.a. to complement the 355,000TEU p.a. capacity of the existing
container terminal, giving the Port a total capacity of 1,050,000TEUs with adequate space for optimisation
and future expansion. The project will not only provide increased container handling capacity in Walvis
Bay, but will also increase the port’s bulk and break handling capacity by freeing up the existing container
terminal to become a multi-purpose terminal. Once built, the conversion of the existing container berths into
a multipurpose terminal would open the port up for increased scope to accommodate a wide range of
additional bulk cargo vessels and even passenger liners.
Most of the quay wall infrastructure in the Port of Walvis Bay is very old and some of these reinforced
concrete structures have already reached the end of their design life. Namport has thus scheduled major
rehabilitation of these structures to occur within the next 10 years. The new container terminal project will
add an additional 600m of quay wall length to the existing 1800m and this will enable major rehabilitation
of existing quay walls to occur with minimal disruption to normal operations. The business case for the
project has been proven in a number of comprehensive studies that were undertaken as far back as 1980 and
of which the last of these preparatory studies were completed in November 2011. To date more than N$60
million has been committed to this project in conducting preparatory studies and investigations. The project
implementation period is three years
Logistics and Capacity Building financed by the Bank’s MIC TA Grant:
National Logistics Master Plan: The study will provide a comprehensive logistics policy and a system
development plan for Namibia with the target year of 2030. The activity includes amongst others: 1)
review of current situation of logistics; 2) analysis on prevailing business models of international logistics in
SADC; 3) analysis of commodity flow service in Namibia; 4) analysis of potential industries and business
models; 5) prefeasibility study on inland logistics park and on “One Stop Border Post”; 6) Integration of
ICT to facilitate and accelerate the growth in the transport and logistics sector and 7) Formulation of an
Action Plan for implementation and monitoring of the Logistics Master plan. The period of implementation
is 9 months.
Road Safety Program in SADC: The road safety program will replicate the Safe Trade and Transport
Corridors Project (executed on the Trans-Kalahari and Trans-Caprivi Corridors) on the Trans-Cunene
Corridor (TCuC) between Namibia and Angola. The activity will include: 1) support WBCG for the design
and implementation of a road safety action plan; 2) design and implementation of a road safety
assessments/audits; 3) design and implement a monitoring system to measure the impact of the road safety
action plan in the TCuC; 4) organize meetings with the authorities concerned and the public parties involved
to ensure adequate cooperation; and 5) disseminate information about the road safety action plans. The
project implementation is 9 months spread over a period of three years.
Capacity & Institutional Building for Walvis Bay-Ndola-Lubumbashi Corridor Management Committee
(WBNLD CMC): The WBNL or Trans Caprivi Corridor via Namibia is important for the Democratic
Republic of the Congo and Zambia. The Walvis Bay Corridor Group (WBCG) serve as the secretariat for
this corridor co-operation and hosts dialogue and meetings among the three countries based on a trilateral
Memorandum of Understanding. The Interim Secretariat hosted by the WBCG will be supported by
providing technical assistance over a period of three years. This activity will also cover coordination,
hosting of meetings, travel and procurement of Information Technology Equipment and Software, Digital
Cameras, Scanners, Data Projectors and DVD Player / Recorders for the Committee.
Capacity and Institutional Building for WBCG Projects Development & Funding Department: This activity
builds capacity and support to the Walvis Bay Corridor Group Projects Development & Funding
Department to ensure ongoing transport facilitation advocacy activities on the country’s regional corridors.
The activity includes: 1) Technical assistance during three years, 2) travel & lodging, 3) organizing and
participating in conferences / Workshops / Seminars to present WBCG project portfolio, 4) Short-term
trainings and 5) Procurement of Information Technology Equipment and Project Management Software,
and Digital Cameras, Scanners, Data Projectors and DVD Player / Recorders. The implementation is over a
period of 3 years.
FIATA Training Program for Freight Forwarders: This activity will strengthen the professional competence
of Namibian freight forwarders in order to ensure that affordable and high-quality logistics services are
available for the needs of the users of the Walvis Bay corridors. The activity will: 1) assess detailed training
needs of registered freight forwarders in Namibia, 2) provide minimum 70 freight forwarders with FIATA
certified training, 3) compile a report for future actions in promoting logistics competence among freight
forwarders in Namibia. Priority in access to the training will be given to (i) female in-service freight
forwarders, (ii) female persons in related industries that are likely to benefit from the FIATA training and
(iii) female persons who intend to enter freight forwarding business. The target number of women to receive
the FIATA training is 40 out of the 70 trainees.
Annex V
V. ENVIRONMENT AND SOCIAL
Environment and Social Action Plan (to be fulfilled before 30th
September 2013 as a condition of the
Loan):
i) A consultation/communications plan for the entire life of the project.
ii) A report on the analysis of the impacts of the project on services such as water, electricity, health
services.
iii) A plan of how the inclusion of the projects workforce will be serviced by the currently existing
HIV/AIDS programs.
iv) An comprehensive Environmental and Social Management Plan (ESMP), that must among others
entail a detailed waste management plan; a business continuity plan; a hazards (especially
technological) management plan; and a detailed plan for better assessing and monitoring the socio-
economic impacts of the project.
v) A report on the cumulative impact assessment for the project considering all other developments
planned for the foreseeable future.
vi) A report on gender analysis and a plan in order to align with the country’s gender equality plans and
if none exist in the country, the regional or international best standards to be applied.
vii) A climate change adaptation plan for the project that is in line with the National Climate Change
Action Plan.
