Africa’s leading financial institutions expressed their interest in financing Namibian participation in the energy sector at the Namibian International Energy Conference in Windhoek on Thursday.
“Local companies will be the ones growing into the future – banking and servicing them is a massive growth opportunity for us,” said Jonathan Ross, Head of Oil & Gas Coverage for Rand Merchant Bank.
“The real financing of an economy has to be through domestic companies. Even if we don’t have our entire local content policy drafted, Namibia can still start helping local companies with access to finance and capital formation,” said Paulo Gomes, Chairman of Orango Investment Corporation. “The issue of cost of capital goes back to the challenge of not having started the real process of capital formation.”
The panel discussed strategies for improving access to and lowering costs of capital for African SMEs, from creating local content funds to strengthening collaboration among DFIs to increase pools of capital and de-risk emerging sectors.
“When the renewable energy sector in Namibia started, we were the first to fund solar and wind projects. After we de-risked the sector, then commercial banks came on board. There is an opportunity for us as a DFI to strengthen project preparation funding and ensure projects are viable to attract commercial banks,” said Mahevo Kadhepa, Senior Strategic Investment Analyst of the Development Bank of Namibia.
“Last year, we launched an EPC contractor financing initiative. When foreign contractors do the job, most of the value is taken out of the continent,” said Helen Aigbe Brume, Director for Project and Asset Based Finance for Afreximbank.
The establishment of integrated value chains is key to creating and retaining value in-country – a strategic priority for Namibia as it formulates its resource development plan.
“The key to actual wealth generation is the value chain, as opposed to the resource. As a strategy, that is the segment of oil and gas that African countries should be most concerned about – that is what we call local content,” said Ejike Egbuagu, Founder & CEO of Moneda Invest, which finances African SMEs. “Our solution is merging capital with technical capabilities on execution, and we are trying to scale this model to southern Africa.”
“The energy space is maturing. The current focus is not just on creating power for local consumption, but on exporting power to other countries through SADC or adding value to our current mineral resources to export to the likes of Europe,” added Kadhepa.
Energy Capital & Power is a media partner of the Namibia International Energy Conference (NIEC) – taking place in Windhoek on April 23-25, 2024. The 6th annual conference unites industry leaders, business executives and policymakers to engage in dialogue, exchange ideas, create new partnerships and identify strategies to foster a prosperous energy industry in Namibia and beyond. For more information, please visit https://www.nieconference.com/
