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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

Sector Director:
Appraisal
Team

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

OITC DEPARTMENT
July 2013

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
1 kilogramme (kg)
1 metre (m)
1 millimetre (mm)
1 kilometre (km)
1 hectare (ha)

=
=
=
=
=
=

2204 pounds (lbs)
2.200 lbs
3.28 feet (ft)
0.03937 inch (“)
0.62 mile
2.471 acres

Acronyms and Abbreviations
AfDB
B/C
CSP
DFI
DRC
EIRR
E&S
ESIA

African Development Bank
Benefits to Cost Ratio
Country Strategy Paper
Development Finance Institution
Democratic Republic of the Congo
Economic Internal Rate of Return
Environmental & Social
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
NPV
PCR
PESC

National Development Plan
Net Present Value
Project Completion Report
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)

Main Milestones (expected) Concept Note approval Project approval Effectiveness Completion Grant closing date Last Disbursement (loan) First Repayment (loan) Last repayment March 2013 July 2013 January 2014 June 2019 December 2017 December 2019 August 2019 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.419.2%) 14.91 million 1.12 million Instrument Project Loan Technical Assistance Counterpart Funding Counterpart Funding ADB’s key financing information Financing Details Loan currency Loan Type Lending Rate Base Rate Funding Cost Margin Lending Spread Commitment fee* Other fees* Repayment Tenor Grace period FIRR.77 million 18. NPV (base case) EIRR (base case) Loan South African Rand (ZAR) Enhanced Variable Spread Loan Base Rate + Funding Cost Margin + Lending Base Spread Floating rate based on 3 month Jibar with free option to fix the Base rate. NAD216 million 14.6% Grant UA MIC TA Grant NA NA NA NA NA NA NA NA NA Timeframe .00 million 12. *1 60 basis points (0. with Sovereign Guarantee from the Republic of Namibia PROJECT NAME: The New Port of Walvis Bay Container Terminal Project LOCATION: Walvis Bay. ii . 1 May.1%) 250 million (7. 1 August and 1 November.00 million Amount (UA) 219.982 million (87. This spread shall apply to 3-month JIBAR which resets on 1 February.3%) 3.LOAN INFORMATION Client’s information BORROWER: Namibian Ports Authority (Namport). 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.44 million 252.60%) N/A N/A Semi-Annual Up to 20 years Up to 5 years 15%. Namibia EXECUTING AGENCY: Namibia Ports Authority (Namport) Financing plan Source ADB loan ADB MIC TA Grant Namport Government Grant TOTAL COST Amount (ZAR) 2.4%) 173 million (5.00 million (0.

private sector development. In Namibia.12 million). 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.21) will be financed by Namport including a grant from the Government of Namibia of ZAR250 million (7. The remaining 12. and brings to the project a wealth of experience. 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. spurring inter regional trade and regional integration. The expected project outcomes include improved efficiency of the port and increase in cargo volumes as a result of increased trade in the region. the project provides opportunities for trainings.91 million) and a MIC TA Grant of UA1. employment creation and promotion of inclusion. The total project cost estimate is ZAR3. Through this project.00 million (ZAR14 million). 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. regional and international level. the Bank is promoting regional integration.419 million (UA252. 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. skills transfers and capacity building which help to increase the skills base in the country. it is an opportunity to further strengthen its knowledge on ports and regional integration which will feed into the Bank’s knowledge series.3%).005. Within the Bank. The project’s beneficiaries are extensive. 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. the trade and logistics industry. Namport is embarking on an expansion program to raise the container throughput capacity from 355. iii . help create sustainable employment and reduce poverty. providing a holistic outlook and wider reach in connecting the continent’s key infrastructure and missing links. with 87. private sector development and jobs creation leading to significant economic development in the SADC region. alleviating poverty in the country and the SADC region as a whole. 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. In response to increased trade-related traffic volumes. ranging from the populations and governments of Namibia and the SADC countries. Knowledge Management The project provides an excellent opportunity for new skills to be developed both within the Bank and in Namibia.982 million (UA219.4% of the total project estimate. The project implementation is over a period of three (3) years.6% financed by the Bank through an ADB Sovereign Guarantee Loan of ZAR2. economic growth and poverty reduction. 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.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. consumers and exporters at national. or ZAR423 million (UA31.000 TEUs to 1.000 TEUs.

00 250.51 Logistics & Trade Facilitation 0.00 290.6 Permanent secretariat =0 2.1 TEU = 0.77 18. ii) Road Safety study. ii) Government fails to implement its plans iii) Regional logistics environment gets worse Mitigation measures Port Statistics i) sound strategies/ business plan.3 Pilots = 0.6 road safety action plan 2.3%] [100%] UA million 219. ii) Vessel waiting time.419.5 for more details) INPUTS Sources of financing: ADB loan ADB MIC Grant Namport Government Grant Total % [87.00 12. STS Operators = 16 2.1 i) Berthing moves per hour (BMPH).00 2.7 Permanent Secretariat for Walvis Bay-Ndola-Lubumbashi Corridor established 2.3 LPI – at least 3.12 (2020) ( ZAR million) 2.431. iii) Dwell time 1.5 Logistics report = 1 2. 2.3 LPI: Logistics Performance Index 1. of operational STS cranes supplied 2. iii) Environmental risks Mitigation measures i) Use of Advanced Contracting reduces procurement delays. Midterm review reports.8% (2011) 5% . of operational RTG cranes supplied 2. ii) Construction risks. Namport quarterly reports Output Risks i) Procurement delays and late project start up. complementary Corridor Group Data infrastructure.3 No. iii) Close supervision and effective implementation of ESMP & E&S action plan mitigates against environmental risks.000 TEUs. ii) 8 hours.00 278.83 Base Cost 213.27 Total 252.4%] [5.00 3. STS = 0 2.2 RTGs = 8 2.00 12.5 days average 1. iii) 14. ii) less than 8 hrs.4 Nationals = 0 2.982. ii) Nationals employed Component D: i) Logistics master plan study.00 14.84 Ancillary Activities 20. iii) Capacity Building for WBNLD CMC and WBCG completed. iv)Freight forwarders trained 2.12 ZAR million 2.8 Freight forwarders trained = 0 2. Audit reports.7 1 road safety action plan = 1 2.00 iv MEANS OF VERIFICATION RISKS/MITIGATION MEASURES African Economic Outlook database Outcome Risks i) Competing routes/ ports take over trade volumes. (refer to section 4.000 TEU 1.1%] [7.4 No of Nationals employed in the project 2.895. STS cranes = 4 2.1 i) BMPH = 60.35 Price Contingency (2%FE.419.5 Logistics report = 0 2.3 Improved logistics competence 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.00/5 2. iii) 8-10 days average 1.00 234.1 Size / capacity of new terminal and No.1 Improved efficiency of the Port 1.2 334.00 174.8 No. iii) strengthen capacity on advocacy tackling regional non-tariff barriers on corridors Progress reports.7 Road safety action pan = 0 2. of Pilots and STS crane operators trained.65 out of 5 (89th out of 155 countries) (2012) 1. 2.2 70% growth TEU 1. promote port and corridor use ii) implement NDP4 action plan.2%] [0.1 i) BMPH = 20. of freight forwarders trained COMPONENTS Component A: Terminal construction Component B: Equipment Component C: Ancillary Activities Component D: Logistics & Capacity Building (2012) Costs ( UA million) Terminal Construction 179.00 . 5%LC) 17. ii) Use of EPC fixed price lump-sum and time certain contract plus effective project and risk management mitigates against construction risks.32 Equipment 12.2 Increased trade 1.5 Logistics report 2. develop and World Bank Data implement logistics master plan.3LPI = 2.3 Pilots = 6.8 freight forwarders trained = 70 (40 women) (2017) 1.4 Nationals employed = 900 (including 300 women) 2.2 RTGs = 0 2.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 PERFORMANCE INDICATORS KEY ACTIAVITIES OUTPUTS OUTCOMES IMPACT RESULTS CHAIN Indicator Baseline Target Improved economic performance Real GDP Growth 3.00 3.44 252.1 Capacity = 650.91 1.50 Physical Contingency (10%) 21. STS Operators = 0.00 173.2 Volume of containers handled 1.2 No. Bank supervision reports.6 Permanent secretariat =1 2.6% (2020) 1.

PROJECT TIMEFRAME v .

I- STRATEGIC THRUST & RATIONALE 1.1 Project Background 1. located on the main trading maritime corridor on the Atlantic.600km of coastline on the Atlantic and bordering on the north.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 UA1.000TEUs with AAGR of 25%. The port is currently operating at capacity and equipment use is at a maximum.1. which control its operations and port policies and regulations.1. The increasing trade is mainly in transit and transhipment which make the bulk of container traffic at the port. 1.000 TEU and is served by well maintained.under the “service port” model.000 TEUs to 337. Cargo volumes almost doubled from 145. Central and West African coastline and a Gateway for transit traffic for the SADC landlocked countries. 1.000 TEUs to 65. Botswana and South Africa respectively. 1 . To achieve this strategy and in order to sustain future growth and attract new businesses. safe and secure transit corridors providing fast and easy access to the hinterland and neighbouring countries (see map in appendix iv). against a target of N$653 million. The Ports of Walvis Bay and Lüderitz are Namibia’s only ports with the former being Namibia’s main commercial port. 1.1. 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. east and south with Angola.000 TEUs in 2006 to 218.1 Namibia is strategically located on the west coast of Southern Africa with 1. The port has a designed container terminal capacity of 355.982 million (UA219.2 The Walvis Bay Port is operated and managed by a State Owned Enterprise (SOE) the Namibian Ports Authority (Namport) . Zambia.000TEUs between 2005 and 2012 with a record increase in revenue of N$755 million in 2012 (N$ 647 million in 2011). As part of ongoing reforms.00 million to the Republic of Namibia to finance Logistics and Capacity Building activities complementing the Port Project.000 TEUs in 2012 with an average annual growth rate (AAGR) of 55%. Transit traffic has also grown over the same period from 25.3 The traffic at the Port of Walvis Bay and along its transport corridors has grown significantly in the past few years.1. Transshipment traffic has grown from 92. the expansion of the port and related facilities is required. Namport reports to the Minister of Works and Transport as well as the State Owned Enterprises Governance Council (SOEGC).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 2.4 Namport’s strategy centers on adopting a hub and spoke distribution model for transshipment serving the South. 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.000 TEUs capacity. 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. 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.

2. 2 .2.3 One of the great opportunities for Namibia to be positioned as a logistics hub is its strategic location within the SADC region. 1. In addition to the facilitation of flows of imports.2 The Southern African Development Community (SADC) is currently one of the strongest RECs in Africa in terms of economic strength by country GDP.2 Project linkages with country strategy and objectives 1. of which this project is a priority. It stimulates the development and upgrade of multimodal transport corridors linking the port to the hinterland and to the SADC region. Economic growth rates during the past few years averaged 5. 1.1. the Port of Walvis Bay remains one of Africa’s most efficient and best equipped. regional and international markets. Namibia’s transport and communication infrastructure remains competitive in relation to what is available in the region. Thirdly. thus logistics has the ability to create sustainable employment opportunities. regional integration and private sector development. 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. improving the country’s transport and logistics chains. has been developed in the spirit of the above national strategies. 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. 1. this traffic will increase from 13 million to 148 million tons. Mozambique and Tanzania. Notwithstanding the developments of ports in the region. offering a gateway for trade.3. reducing transportation costs and stimulating economic growth. Namibia’s Vision 2030. Namibia’s business environment is relatively conducive. Timing and urgency are of essence in this regard.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. Total SADC trade almost quadrupled between 2000 and 2011 from US$91. as other countries within the region are also developing plans to take advantage of the opportunities on offer.3 Rationale for Bank’s involvement 1. 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. safety and security in the country also ensure that goods transported via road and rail. exports and trans-shipments via Namibia. These are infrastructure development. 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.52 million in 2000. This strategy is expanded in the transport sector’s Integrated Transport Master Plan (2013-2023) and the Namport Business Plan 20132017 (Corporate). the availability of a good international logistics network will also attract other industries to Namibia. Secondly. reach their intended destinations without tampering. This corresponds to an average GDP growth of 6% per year.1 The port expansion project addresses three core operational priorities of the Bank’s Ten Year Strategy (2013-2022).089.2. and contribute to economic prosperity and poverty reduction. i) Infrastructure development: the port of Walvis Bay is Namibia’s main commercial port and links the country’s multimodal transport corridors to local. to US$353.9% making it one of the fastest growing developing sub-regions with direct linkage to growth in trade.636.4 million in 2011. Transit traffic from landlocked countries is expected to increase by 10-14 times over the next 30 years and for the SADC.

1. and provides the opportunity to strengthen commercial linkages and promote new trading partners for the region.4 Donors coordination 1. the Bank is providing support through a MIC TA Grant (UA0. 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. among others:.59million) for a study of 8 Namibian Airports including the main international airport. DRC. increasing productivity and competitiveness. creation of employment opportunities and promotion of inclusion and economic transformation. 1. 1. the European Commission (N$0. and development and maintenance of national roads infrastructure. Japan. JICA and the EIB have provided grants for various studies for the Walvis Bay port expansion project. Germany featured as the country’s largest donor (over N$2 billion). the Government moved to Sector-Wide Approach (SWAp) with the German Government and the European Union (EU) being the main partners. rehabilitation and railway infrastructure management. 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.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. Zambia.2 billion for.1 Donor coordination in Namibia is carried out at national and at sector level.75 billion).expansion of the port of Walvis Bay. China (N$1. The project promotes the emergence of small to medium size enterprises. 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. 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. 3 .3 In the roads subsector.4.S. sector working group meetings are held bi-annually and key issues emanating from these discussions then feed into the high level Forum. At the sector level. In maritime.ii) Regional integration: the project is potentially serving up to seven major economies (Namibia.6 billion).3.5 billion each). Finland.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. 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. Angola. through increased competitiveness and promoting intra and inter-regional trade. scaling up of private investments. (NS$1.4. the project also aligns with the Southern Africa Regional Integration Strategy Paper (RISP) 2011-2015 and the CSP 2009-2013.4. The project also serves to foster South-South cooperation. financial support has mainly come from the government and through loans from local commercial banks.8 billion). The Government allocates between 8% . In aviation.2 Apart from the Bank’s ten year strategy. 1. followed by the U. Botswana. Between 2008 and 2012.1 billion) and others including the African Development Bank (N$0. France (approximately N$0.2 billion total). The German cooperation (KfW). each of trade significance to the economy of the sub-Saharan sub-continent. Zimbabwe and South Africa). the World Bank (N$0.

00 3.871 211. The expected long-term impact of the project includes increased and sustained trade between SADC and the outside world. electricity supply upgrade. 4 . Ancillary activities 328 24. Equipment 206 15. The expected outcomes of the project include: improved port efficiency. communication system.1 : Project Components (ZAR (UA Million) Million) A. paved areas. 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. financially and environmentally the most sustainable.75 construction on reclaimed land B. ii) a road safety program on transit corridors.2 Project description and components The project will expand the Walvis Bay port container terminal on reclaimed land from the Walvis Bay channel.2 summarises the alternatives explored and reasons for their rejection. The project location allows fulltime works with minimal disruption to normal operation and scope for future expansion. The solution retained was after series of studies. etc.22 D. Supply and installation of terminal operating system. iii) capacity building for the Walvis Bay Corridor Group and the Walvis BayNdola-Lubumbashi Development Corridor Management Committee and iv) a specialised training for freight forwarders (FIATA training) 2. investigations and consultations by Namport and its consultants. to increase the annual throughput capacity from 355. buildings. This solution was found to be technically.1.1 Project development objectives 2. pilot and operator trainings.1 The sector goal of the project is to promote trade and regional integration. whilst the financing is an ADB Sovereign Guarantee loan to Namport which responds to the urgency to implement the project without any further delays.000TEUs.000TEUs to 1.419 252. The project components are presented in Table 2. The Project will also include a logistics and capacity building component to complement the port expansion project. workstations. Logistics and Capacity Building 14 1.005.1. railway lines and services reticulation. Table 2.II - PROJECT DESCRIPTION 2.15 Component C. to complete the terminal expansion project The component includes i) developing a national logistics master plan. The solution retained is a port expansion project located southwest of the current port terminal on reclaimed land from the Walvis Bay channel. The contract type for the main civil works is an EPC contract allowing an integrated solution. Private financing would have required the finalisation of the PPP framework and reform of the port to transfer its operations to a private developer.12 Total Project Cost Component Description Construction of a modern container terminal consisting of quay walls. STS (ship-to-shore) cranes. increased cargo volumes. Table 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. economically. roads. New terminal 2. improved logistics performance and increased inter-regional and international trade. Supply and installation of RTG (rubber tired gantry) cranes and relocation of the existing from the current container terminal. 2.

2.5.Table 2. Therefore.2 : Project Alternatives Considered and Reasons for Rejection Alternative Brief Description Reasons For Rejection Project location Current Extending the existing  Limited length of quay extension terminal container quays north Significant impact on port operations and existing eastwards factories  Enormous costs for expropriations and compensation  Little scope for future expansions Fishing port Developing a new  Significant environment and social impacts on the area container terminal at the fishing business fishing port area  Enormous costs for expropriations and compensation  Little scope for future expansions Project contract Traditional Procuring detailed  Significant risk exposure due to technical complexity Contracts design and construction of the project separately  No overlap of design and construction  Lengthy process Financing package PPP – Full private sector–sponsored  To privatize such a strategic national asset at this concession project developing the point in time was seen not to be in the country’s best new container terminal interest as a standalone business  There is currently no PPP legal framework for port unit projects in Namibia  Time to setup the legal framework is a lengthy process. The project components and costs are presented in table 2. 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.5. is ZAR3. 5 .336 million (UA98. 2.5 Project cost and financing arrangements 2.2 The project cost estimates were based on feasibility studies conducted in 2010.5 million) or 39% of the total cost estimate is in local currency.12 million) of which ZAR2. prevailing rates and contract risk distributions. Also. the specific project loan has been chosen as the most appropriate instrument for the intervention of the Bank in this port expansion project. The costs were updated in 2012 after series of supplementary studies conducted to reconfirm the project’s feasibility. taking into account international norms.419 million (UA252. The investments against which funds are to be disbursed are well defined and specific.63 million) or 61% of the total cost estimate is in foreign exchange and ZAR1.3.1 The total project cost at appraisal (net of all taxes/duties) including physical and price contingencies.083 million (UA153. In the same regard.4 Project type The ADB financing will support the construction and rehabilitation of identified economic and social infrastructure. during appraisal. by the design consultants. the MIC TA Grant has been determined to be the most appropriate instrument to finance the logistics and capacity building activities. when the project is urgently needed  Possible backlash with labour organisation 2.

895 290 234 130.1% 7.236 171 118 12 2.6% 12.3: Project costs by component (Net of Taxes) ZAR (million) Components A. The Bank’s financing will be in the form of an ADB Sovereign Guarantee Loan of ZAR 2.4% .00 million (ZAR14 million).12 61% Foreign Exchange 1.00 Foreign Exchange 135.5 respectively and justification of the Bank’s contribution of more than 50% of total project cost estimate is provided in annex I. Logistics & Capacity Building Total base cost Physical contingencies Price escalation Total Project Cost Total Cost 2.00 9. The source of financing and the project expenditure schedule are summarised in table 2. Namport and the Government of Namibia. Equipment C.44 252.00 Local Currency 1.4% 87.31 0.895 290 234 3.52 83.982.27 61% 2.91 1.4% of total project cost estimate.12 87. Namport has indicated that there are other project activities up to a total of ZAR300 million which will be financed by Namport.083 1.00 12.34 6.42 153.51 89% 42% 5 7 12 0.4: Sources of financing ZAR (million) Source ADB (Loan ) ADB (MIC Grant) Namport Government Grant Total Project Cost Foreign Exchange 1.50 21.3% of total project cost estimate and Namport contribution of ZAR173 million (UA12.80 12.00 UA (million) Total 2.83 37% 1.764 176 143 1.40 7.143.431 174 278 12 2. Table 2.41 8.44million) or 7.00 98.419 ZAR (million) ADB MIC TA Loan Grant 2.84 108.3% 100% Table 2.00 173.525 253 204 2.16.61 Total 2.52 0.431 Foreign Exchange 109.336 3.63 98.00 5. New terminal construction B.6% of the total project cost amounting to ZAR 2. 141.336.01 10. Namport’s counterpart contribution is 12.02 98.487 Local Currency 944 154 118 Total Project Cost UA (million) Total 2.419. comprising a grant from the Government of Namibia of ZAR250 million (UA18.4 and 2.6% 12.10 13.982 12 1 1 14 6 % Bank % Namport contribution & GON Namport contribution & GON 195 92% 8% 3 98% 2% 160 42% 58% 100% 0% 358 36 29 423 87. Ancillary activities D.91 million) and MIC TA Grant of UA1.91 million.982 million (UA219.77 million). The Bank will finance 87.00 250.84 20.48 11.131 114 91 2. Logistics & Capacity Building Total Base Cost Physical contingencies Price escalation Local Currency 69.31 0.4% 5.32 61% 20 160 174 278 11. New terminal construction B.36 8.996 million or UA220.00 14.839.5.77 18.60 0.16 1.083.00 3.84 2.5: Source of financing by component Components A.71 1.00 74.60 5.35 17.63 Local Currency 84. Ancillary activities D. Equipment C.50 Total Total Project (%) 219.50 252.21 10.71 Foreign Exchange % 179.2% 0.419 153.75 213.56 8.3 The expansion of the port will be co-financed by the Bank.Table 2.

50 17.00 91.06 4. jobs creation and capacity building resulting in inclusive growth and economic transformation promoting poverty alleviation in the SADC region.27 252.39 185.00 1. 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.7.1 In general.131.33 3. other ports in the region. 7 .52 153. municipal and regional government. design and financing of the project benefited from the wide consultations carried out by Namport and its consultants and the Bank project appraisal team.487. NGOs and specific interest and the donor community. economic growth. 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.75 9.6.00 41.00 3.00 1. 2. The key stakeholders consulted include government ministries and agencies relating to the sector.336.12 7% 2. 2. The project’s design and implementation modalities have been shaped by the concerns that were raised.00 234. Zimbabwe and South Africa. local residents. 2.00 250.00 2.00 86.6: Project cost by category of expenditure Category Goods Works Services Total Base Cost Physical contingencies Price escalation Total Project Cost ZAR (million) Foreign Local Total Exchange Currency 191. and sharing of interim and final project reports.00 290.00 10.00 1.1 The formulation. transport operators and shippers associations.6 Project’s target area and beneficiaries 2.75 98.Table 2. 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. Central and West Africa subcontinent. Angola.71 76.7.764.00 UA (million) Foreign Local Exchange Currency 14.083. The development prospects by the project contribute towards the development agenda above as the project will directly benefit the people.518. the region will emerge as competitive in the world economy.03 130.10 83.419.35 10% 143.7 Participatory process for project design and implementation 2. through bilateral and town hall meetings.41 18.895.00 1.6. Botswana.00 127.2 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.04 6. By so doing.00 59.00 2. therefore the project impact footprint covers the Southern. the governments and the private sector in Namibia. The benefits include increased opportunities for trade. The main economic objective of the SADC region is therefore on the development of an environment.36 213.01 8.63 6. poverty eradication and establishment of a sustainable path of development. DRC. international shipping lines.2 Poverty is one of the major development challenges in Africa including the SADC region and is reflected in the high level of unemployment.00 13. corridor group.00 114.33 109. the project will affect the SADC region and countries on the southern West African coastline up to Ghana.50 % of total base cost 9% 87% 4% 100% Total 176. The consultations served to inform stakeholders of the project and its direct and indirect impacts and to obtain the stakeholders’ perspectives.34 21.031. the logistics industry including freight forwarders. conducive to regional integration.00 2. Zambia.00 1. local businesses.

undertook a market study for the project in 2011.8 Bank Group experience. the Bank has experience in design and implementation of the following port projects: – Lekki Tolaram Port.2 In Namibia.8. The Bank will also monitor during supervision missions. 2. 2. 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. and v) the Bank is providing a MIC TA Grant for logistics and capacity building to help increase the skills base in the sector. 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. 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. Kamanjab Omakange Road Project and the Namibian Airports study. and Banjul port. and v) reports from the logistics and road safety studies. (iii) dwell time. All the operations have been completed except the airports study which is currently on-going.PROJECT FEASIBILITY 3. namely. and (v) logistics competence. The study assessed the overall competitiveness of Namport vis-à-vis other competing ports in the Southern Africa region.1 The Bank has extensive operational knowledge in developing infrastructure projects in Africa. Djibouti bulk terminal. lessons reflected in project design 2. The output indicators include amongst others: i) size of the new port. mid-term review and at project completion. ii) equipment supplied.1. Northern railway extension project. Dakar container terminal. 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) vessel waiting time. In the maritime subsector. iv) nationals employed. 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. preparation and implementation of transport projects in Namibia. The Bank’s African Development Report 2010 also provides valuable information on ports in Africa. 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.8. III . 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) pilots and operators trained for the new terminal. Collection.1 A consultant commissioned by Namport. Damietta port. iv) volume of containers handled.3 Through the interventions mentioned above. monitoring and evaluation of the indicators (disaggregated by gender) will be under the responsibility of the Namport Project Manager and his team.8.9 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). those in South Africa cater mostly for local and transit cargo.1 Economic and financial performance Traffic Demand 3. Lomé container terminal. 8 . the Bank has gained significant experience in the design. 2. 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. Aush-Rosh Pinah Road project.

and can be reasonably well quantified. given that 50% of the total traffic is transshipment that requires no intermodal operations.3 Three major sources of direct economic benefits have been identified: i) time costs savings for vessels calling at the port. 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.839 Namibia Government 323 Additional labour income 12 Consumers 1.4 Time costs savings is expected to be shared by Namibian and regional consumers and exporters.2.6%. Additional traffic translates into higher earnings for Namport and its staff.503 Exporters 1. the omission of the time savings to trucks is unlikely to lead to a significant underestimation of the total economic benefits.252 International shipping lines 3. Estimation of the third benefit is constrained by the scarcity of relevant statistics and is therefore omitted.002 1. 3. ii) new employment opportunities for nationals. iii) time costs savings for freight trucks that transport cargo from and to the port.1.5 The expansion will attract new customers and greater volume from existing ones. million NAD) 2.3.1.839 million with an economic NPV of NAD498 million and EIRR of 14. These are summarized in table 3. 9 .1. Namport will be constrained by its maximum capacity of 355k TEU. and by international shipping lines. they have a distributional impact and are thus captured in the stakeholder analysis. The government will also collect more value added tax revenue from traffic. Table 3. to explore how the economic benefits are distributed among stakeholders. 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%.2 The consultant prepared traffic forecasts that are disaggregated by three submarkets: domestic. Without the expansion project. the benefits identified in the previous paragraphs are the most immediate. In the base case.1. additional benefits are omitted thus yielding a more conservative estimate.2 : Allocation of Projected Benefits among Stakeholders (Present Value. While taxes are transfers and should not be counted as an economic benefit.1 : Base Case Volume Traffic Projections (kTEU) Import Export Transhipment Total 2013 2014 2015 2016 2017 2018 2019 2020 2025 2030 78 62 186 327 80 69 190 339 110 95 223 428 125 114 254 493 142 134 284 561 159 151 315 625 171 161 346 678 183 172 377 732 230 230 369 829 230 230 403 863 Economic Analysis 3. In general. the expansion project is estimated to generate for Namibia externalities equivalent to NAD2.252 Southern African Region Consumers 877 Exporters 376 1. which contribute to additional corporate income tax and labour income tax for the government. Namibia is expected to have a compounded GDP growth rate of 6% from 2014 to 2030. transit and transhipment. and indirect taxes. Table 3. In this analysis. that would otherwise not materialize in the project’s absence. However.

The average DSCR.494 1. 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.5% .4 : Key Financial Performance Indicators Economic NPV at 12% EOCK (real) Economic IRR (real) Equity NPV at 12% ROE (real) Equity IRR (real) Project IRR (real) 10 498 million NAD 14. Table 3.046 1.030 2.27 3. Namport has been assigned a long term credit rating at A.21 in 2012.30x in 2015.Financial Analysis 3. The company has maintained a high level of liquidity.5% while the Equity IRR is estimated to be 15.19 622 254 2. revenues decreased from NAD 616 million in 2009 to NAD566 million in 2010.3 : Namport Selected Financial Indicators (million NAD) TEU (000s) Total Revenue EBITDA Debt to Equity Ratio CF available for debt service Total debt service DSCR 2009 266 616 342 0. is estimated to be 2. The project will also bring additional benefits to other stakeholders. 3. The following table presents Namport’s historical financial indicators and their forecasts.31 N/A 75 N/A Actual 2010 2011 256 224 566 647 241 119 0.63 0. Table 3.7 A detailed financial model for Namport corporate financial flows was developed by their financial advisor for this project.21 2.21 N/A 205 N/A 2014 339 856 687 0.9 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 Project IRR for the expansion project is calculated to be 8.61 1.45 Forecast 2016 2018 2020 2022 2024 493 625 732 779 822 1. but bounced up to NAD755 million in 2012. sensitivity analysis results presented in the technical annex shows that the project is viable despite adverse shocks. based on consolidated cash flows and both existing and new debt. 3. Thus.0% in real terms. Cash flows of the expansion project were integrated into the corporate financials.036 1. Since 2011. Overall.1.0% 8. independently from the existing operations of the port.02x and the minimum DSCR is 1. the debt-equity ratio has been at low healthy levels and dropped to 0. For the past several years.35 435 586 619 1. indicating strong capacity for additional borrowing.328 253 228 281 441 407 1. The forecasts indicate that the project generates sufficient operating cash flow to recoup initial investment costs and to service debt.175 1. Furthermore. cash or cash equivalent has been 61% of sales.35 0.1. until 2034. ensuring that the expansion decision is judged on its own merit. The EBITDA exhibited a similar pattern. the Equity NPV for the expansion project is NAD216 million at a 12% discount rate (real). on average.72 2.1. the projections confirm the strong debt service capacity of Namport.04 0.50 1.449 2.622 2.57 2.8 While debt service capacity has been evaluated based on overall Namport financials. The second debt service period starts with the first principal repayment of the new loan in 2019.6% 216 million NAD 15.917 259 671 737 1. the investment viability of the expansion plan is assessed on incremental basis.34 N/A N/A 113 171 N/A N/A 2012 292 755 423 0.by Fitch Ratings and in May 2013. Under the base case scenario. revenues show the impact of the world trade slow-down owing to the financial crisis.1.6 From Namport’s recent audited financial statements.35 3. The key indicators for financial and economic performance are derived from the consolidated corporate model of Namport.

Gender 3. 3. skills development options. detailed baselines studies on the effects on the lagoon (siltation and inflow and outflow rates). Climate Change 3.2. which highlights the importance of climate change considerations by the project. Gender-based violence and the influence of patrilineal traditions are of national concern. 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. a hazards (especially technological) management plan.2 Environmental and Social impacts 3. Social 3. The outstanding E&S reports and plans will be submitted to the Bank as part of the E&S Action Plan. Relevant E&S documentation was prepared. the ultimate costs for mitigating and enhancing E&S impacts will be known with greater certainty. Once a comprehensive ESMP is developed building upon the existing EMP. To ensure that women benefit from the project. Awareness campaigns on sexually transmitted infections. considerations will need to be introduced. and a detailed plan for better assessing and monitoring the socio-economic impacts. the promotion of entrepreneurship. and includes strategies for addressing disasters.3.2. Measures will be enacted to limit a potential rise in the commercial sex industry by the project. by 30th September 2013.2 An Environmental Management Plan (EMP) has been prepared by Namport to address these impacts. The project will result in environmental and social (E&S) impacts. The project area is characterized by gender inequities and disparities. amongst other features. such as job profiles and potential quotas. such as a cumulative impacts assessment.2. baseline studies on the effects on the lagoon. 11 . The Bank has requested Namport to develop a more comprehensive Environmental and Social Management Plan (ESMP) which would integrate a detailed waste management plan. will integrate gender sensitive components targeting Namport employees and local communities. and detailed analysis of the project’s impacts on utilities. although some of these will be low in the nature of their significance. Namport has engaged the services of a consulting firm and is currently addressing the E&S gaps. such as HIV/ AIDS. sea level rise and climate change impacts. increased trade and economic activities benefiting the construction.1 The project has been classified as Category 1 in accordance with the Bank’s Environmental and Social (E&S) Assessment Procedures. 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. 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. A national climate change action plan has been prepared.2.2. to encourage women’s participation in the project’s employment opportunities.3 The Walvis Bay area is characterized by a chance of 30 cm sea level rise. a business continuity plan. and an Executive Summary of the Environmental and Social Impact Assessment (ESIA) was disclosed on the Bank’s website on 22nd March 2013. educational and training opportunities.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. Namport will also undertake additional measures. an emergency response plan.4 Following the Bank’s recommendation.

1.1.transport. The Board comprises five independent non-executive directors whose terms of office are three years each. Through the comprehensive ESMP it is developing and the CSR initiatives initiated through Namport’s Social Investment Fund. and an increased scope for the marina development. Namport has. and is assisted by members of senior management. an increased risk of communicable diseases like HIV/AIDS. Under the terms of the Namibian Ports Authority Act.1. Under the State-owned Enterprises Governance Act. 1994. 4.IMPLEMENTATION 4. hospitality and tourism industries.2. the power to enter into contracts. These powers include. a body corporate established under the Namibian Ports Authority Act. 4. the Minister of Works and Transport must enter into a Governance Agreement with Namport’s Board of Directors that sets out the roles.1 Implementation arrangements Borrower and Executing Agencies 4. 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. 2006 (Act No. Namport will work to address and diminish the impact of these social risks. Involuntary Resettlement 3. truckers and sailors which would add pressure on available resources and infrastructure. 4. behavioural changes leading to greater theft. to realize the full value of their recent investments. such as an influx of workers. prostitution and alcoholism. The Board of Directors appoints a Chief Executive Officer (CEO) on a five-year contract that is renewable at the discretion of the Board. responsibilities and obligations of the Ministry and Namport. with leases in the area being targeted for the marina development.2 Namport has a two-tier governance structure consisting of the Board of Directors and the executive management. headed by the Port 12 . and manages the Port of Walvis Bay. all the powers that may be exercised by a company under Namibia’s Companies Act. among others.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. and the power to borrow. The Minister of Works and Transport appoints Namports’s Board of Directors. 1994 (Act No. The Project Implementation Committee (PIC).1 Namport. a growth in new small and medium size enterprises. the Port of Lüderitz. 3. road safety concerns due to increased traffic. The CEO is responsible for the execution of strategy and management at Namport. and a Syncrolift (dry dock facility). The Board of Directors has overall responsibility for the affairs of Namport. including contracts outside of Namibia.6 The project will also result in social risks.7 The project will not involve either the physical or economic displacement of any project affected persons.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. 2 of 1994) and operating under the State-owned Enterprises Governance Act. IV . will be the sole beneficiary of the loan. 2 of 2006).1. and an inability of local businesses. Namport has operated as the National Port Authority in Namibia since 1994. the latest such Governance Agreement was entered into on 20th May 2010 for a period of five years.2. in addition to the specific powers vested in it under the Act.

supported by external consultants providing specialist advisory service. 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 review has concluded that while the 13 . 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. Namport and the Government of Namibia then approached the Bank to provide finance to the extent of almost 87. 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. 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.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). 4.10 As the GoN and Namport have requested the Bank to finance a procurement that has not been conducted using the Bank’s Procurement Rules. a specialized team of consultants have helped Namport to design the EPC procurement process and is currently carrying out the evaluation.8 Invitations to bid for this procurement were locally and internationally advertised in the print media and online on the Namport website. For this purpose. Procurement 4.1.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 PIC comprises Namport experts in all disciplines for the project’s activities.1. the Bank commissioned two independent procurement consultants to support Bank Procurement Specialists in carrying out the due diligence. 4.9 The current situation that Namport is facing is unprecedented. At that time.7 The procurement action for the expansion of the container terminal was initiated in September 2012. 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. 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.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. The questions from the bidders were promptly answered. Procurement for the EPC Works Contract to Construct the New Container Port Terminal 4.Engineer and Projects Manager is responsible for the day to day management and supervision of project activities and report to the PESC. 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.6% of the cost of the project. It did not appear that.1. 4.1. 4.1. The bidding process has gone through stringent diligence including a mandatory pre-bid meeting and site-inspection by the bidders.1. 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. 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. The bids were received on 18th February 2013 and are under evaluation.

procurement process was rigorous and detailed. internal and external audit requirements are further measures towards effective corporate governance.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. 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. the procurement of all project components namely: equipment. 4. (iv) bespoke contract provisions that transferred significant risks to contractors. An assessment of Namport’s and WBCG’s financial management arrangements for the implementation of the project (which included a review of the budgeting. (Some of the deviations included (i) Namibian dollars as the payment currency irrespective of the nationality of the bidder. 4.13 With the exception of the EPC main works contract. may therefore. be necessary for this first time engagement with Namport.1. This waiver is being sought only for the EPC works contract. and did not appear to deliberately favor any bidder or set of bidders. ancillary services and logistics and capacity building 4. 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. 4. Procurement of equipment.1. Furthermore. (v) commercial arbitration to take place in Namibia and not in a neutral place. internal controls. 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. The audit costs will be borne by the respective implementing entity and the audit reports together with the 14 .1. 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.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. 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.15 In accordance with the Bank’s reporting and auditing requirements. A flexible and pragmatic approach.1. 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.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. therefore.1. and the incorporation of F&C and Audit Rights provisions in the contracts before signature. accounting. 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.(ii) the contract prices being fixed despite the contract period being three years. It would. In addition. flow of funds. The details of the procurement arrangements are summarised in the technical annex. 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. (iii) bid-evaluation that allowed Namport to use unspecified criteria if it felt it was in its best interest. there were departures from the Bank’s procurement principles. Financial Management 4.

Mid-Term Review. project activities will start (upon approval of the loan and grant) in the last quarter of 2013 and end towards the end of 2016.1 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. Health and Safety. in accordance with the schedule in Table 4. Field Mission. all in the Bank’s standard format.2 Monitoring 4. The grant and loan closing dates are scheduled for end of 2017 and 2019 respectively. in line with the Bank’s Operations Manual.1 : Schedule for Project Monitoring Timeframe Milestone Monitoring process / feedback loop Q4 – 2013 Q2 – 2014 Q4 – 2014 Q2 – 2015 Q4 – 2015 Q2 – 2016 Q4 – 2016 Q4 – 2017 Project Launching Construction start + 6 months Construction + 14 months Construction start + 20 months Construction start + 26 months Construction start + 32 months Construction start + 36 months Defects Liability and end of 1st yr Field Mission. Project Completion.16 The Loan will be disbursed for two categories of expenditure including Works and Goods with a provision for future consulting services. the activities planned following loan and grant approval will be closely monitored. Field Mission.2. Table 4. Field Mission. Fire and Waste Management Officers). Field Mission. annual audit reports as well as the final project report. 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.1.2 Apart from the schedule for monitoring activities. Disbursement Arrangements 4.2. 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. Project Evaluation. 4. works and services and the Bank’s rules and procedures as laid-out in the Disbursement Handbook insofar as may be applicable. (A draft audit TOR that can be used as a guide has been availed to Namport).1 below. Project monitoring will be carried out by the Bank’s supervision missions. 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. Disbursements under the Loan and Grant would be made in accordance with the list of goods. Progress Reporting Progress Reporting Progress Reporting Progress Reporting Progress Reporting Progress Reporting Completion Report M & E Report 4. The MIC TA Grant will be disbursed for two categories of expenditure including Goods and Services. 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. Namport’s annual audited financial statements will also be submitted together with the project audit report and the project management letter. At the level of the Bank. if any.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. According to the estimates. 15 . In addition.

2 : Historic and Projected Terminal Maintenance Costs Maintenance costs 2009 Actual 2010 2011 2012 2016 2017 Existing terminal New terminal Revenue Operating costs Assets As % of revenue As % of operating costs As % of assets 24 N/A 616 280 2.118 1. 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. taxes. for the existing and the new terminal.031 3.002 9.355 11.0% 5. 4.5% 32 N/A 755 465 2. 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.8% 0.3.1% 5.8% 0. respectively.0% 1. ii) 6th out of 53 African countries.0% 8.6% 44 114 1. and (iii) the use of direct disbursement methods to channel project funds to contractors and service providers.0% 4.909 16. and iii) 4th and 5th least corrupt country in Southern Africa and SSA. Namibia has been ranked: i) between the 50th-75th percentile out of the 212 countries by the World Bank’s 2011 Worldwide Governance Indicators.1% 95 286 4.0% 1.0% 29 N/A 647 362 2.288 6.2 presents the actual.0% 8.3 out of 100. past and projected maintenance costs. and repayment of debt and recovery of capital costs.1 Namibia has consistently ranked among the top African countries on good governance. The Authority’s Board is appointed by the portfolio Minister of Works and Transport (MWT) who has the overall responsibility for policy and regulation.9% 6.4 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.418 865 5. Table 4. and the Ministry of Finance who has an oversight role in Namport’s financial and project development activities.9% 5. with an overall score of 67. 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).879 4.1% 6.606 4.046 701 5.2% 53 137 2.239 1. (ii) Bank prior review and approval of all project procurement activities.6% 16 Projection 2020 2025 2030 .8% 0. Table 4. The accumulation of funds will be spread over five years prior to the expected time of maintenance activities.030 1. 4. It is noted that the same trend of maintenance expenditures is expected to continue. with the exception of property rights and rule based governance.4% 10.5% 1.2% 0.4.553 6.372 9.063 6. In addition. which minimizes the risk of dependency on cash flows of a single year. 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.9% 0. maintenance expenses. by the 2010 Mo Ibrahim Index of African Governance.3 Governance 4.395 9.3% 42 27 1.2% 1.447 9.3.2 Namport has adopted the principles of good corporate governance as contained in the King Report 2009 (“King III”).3% 71 214 3.8% 34 N/A 566 344 2. While regular maintenance costs for both terminals are planned to be funded by operating cash flows. by the 2010 Corruption Perception Index by Transparency International.

which will increase the capacity to deal with these problems. Within the Bank.5. the Bank’s decentralization strategy will also have positive impact in assisting the Executing Agency.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. 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. The project has influence to build-up local capacity through employment of nationals for skilled and unskilled jobs related to the project’s activities.4 Risk of an adverse regional logistics environment: Road transport operators need workable access to other countries regionally.5.1 The project provides an excellent opportunity for new skills to be developed both within the Bank and in Namibia. 17 . 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. 4.5. it is an opportunity to further strengthen its knowledge on ports and regional integration which will feed into the Bank’s knowledge series.5 Risk management 4. As mitigation measure the Project will support the Walvis Bay Corridor Group.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. 4. These initiatives are already yielding positive results translating to increased trade volumes and motivating further efforts by the country.5. the project incorporates specialised training which helps to build the skills-base of the company. 4. At Namport level.5. each of which may constitute a potential risk: 4. In addition. 4. to foster closer collaboration and promote the use of the Walvis Bay port and corridors.5 Risk of procurement delays and late project start up: in order to avoid delays due to procurement. The Bank’s task team will follow up on a periodic basis. 4. the Bank is providing support through a MIC TA Grant.4. transport rates may be increased and the overall competitiveness of the corridors may be compromised.6 Knowledge building 4.6 Construction risks (including technical risks.6. 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.5. iii) appointment of the Walvis Bay Corridor Group to promote the corridors and spearhead tri-partite agreements and partnerships. It has also incorporated Monitoring and Evaluation on a periodic basis to inform on progress.5. If non-tariff barriers hinder operations too much. authorities and the selected contractor. In addition. 4.1 The successful implementation of the project and achievement of its development objectives predicates on several assumptions.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. 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.

18 . 5.02 of the General Conditions. Freight forwarders are often the “one-stop-shop” interface between shipping lines.4.3 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. in form and substance satisfactory to the Bank.1 above and (ii) fulfillment by the Borrower and Guarantor of the provisions of Section 12.2 Conditions associated with Bank’s intervention 5.1 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. (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.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.2. customs and road carriers. (ii) a guarantee agreement between the Republic of Namibia and the Bank.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. The Project will address this by organizing FIATA training particularly for female in-service freight forwarders and persons who intend to enter this business.01 of the General Conditions Applicable to the African Development Bank Loan Agreements and Guarantee Agreements (Non Sovereign Entities).2. 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.2. 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. 5.6. (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.2.2 above and the fulfillment. 5. It is therefore important to ensure that the professional competence of the industry is up-to-date and meets customers’ requirements. 5. 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.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.2.2.

VI . (iii) maintain (a) the Project Implementation Committee with terms of reference. 5. 19 . each in form and substance satisfactory to the Bank. within thirty (30) days of such occurrence.RECOMMENDATION 6. (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. (ii) inform the Bank of any significant environmental and social incidents within ten (10) days of their occurrence and.00 million to the Republic of Namibia for the purposes and subject to the conditions stipulated in this report. (ii) The Borrower shall.2. within one (1) month of the closing of each budget cycle commencing with its 2012-2013 budget and throughout the duration of the Project.6 Undertakings: (i) implement.1 Management recommends that the Board of Directors approve: (i) the proposed loan of ZAR 2. provide evidence in form and substance satisfactory to the Bank that the grant to the Borrower from the Guarantor has been duly concluded.5 Other Conditions of the Loan: (i) The Borrower shall. provide details on corrective actions which the Borrower will implement to address each such incident. 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.5. and (v) promptly notify the Bank of any material modifications to the EPC works contract. (iii) The Borrower shall. 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. 5. within three (3) months of the signing of this Agreement.982 million to Namibia Ports Authority (Namport). and (ii) the proposed MIC Technical Assistance Fund grant of UA 1. not later than 30th September 2013.1. submit to the Bank each item listed under the Environment and Social Action Plan set forth as annex V hereto. with the guarantee of the Republic of Namibia for the purposes and subject to the conditions stipulated in this report. together with evidence of annual budgetary allocations on the part of the Guarantor for such grant amount. 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.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. provide evidence in form and substance satisfactory to the Bank of the annual budgetary allocation for the Namport contribution to project financing.2.

000) 2010 200.Female (years) 2012 63.2 40.8 77.0 19..000) 2012 40.Total 2010 106..4 2002 1.472.8 3.6 58.046.5 12..0 Population < 15 years (%) 2012 35.1 31.9 2.6 61.9 82.0 234.3 37.2 80.0 .1 Daily Calorie Supply per Capita 2009 2.0 10..6 161.0 0.2 10.4 68.. .2 ..4 1.3 .9 .3 51.4 1.4 6.1 25.9 0.8 54.976..6 27...3 100.1 65.4 1.0 48.0 Crude Death Rate (per 1...8 0.9 Human Develop.0 65. : Not Applicable .0 2001 2011 2000 Land Use (Arable Land as % of Total Land Area) Africa Last update: April 2013 .0 782.7 2.4 4. 5.. WRI.000) 2011 723.9 948.2 3.2 Life Expectancy at Birth .3 Total Fertility Rate (per woman) 2012 3..2 39.0 934.3 62.2 17.Total (%) 2.2 42..6 Underweight Children (% of children under 5 years) 2007 17. Namib ia 2007 2000 Annual Rate of Reforestation (%) 2006 Annual Rate of Deforestation (%) 2005 11.3 Female Population 15-49 years (% of total population) 2012 26.Total 2007 64. WHO. Note : n.8 Maternal Mortality Rate (per 100.0 99.6 77.000 people) 2010 37.0 2. UNICEF.7 1.1 3000 GNI per Capita (US $) 2010 4. … : Data Not Available. .3 3. .5 39.9 106.5 1..0 65..0 Women Using Contraception (%) 2012 57. Country’s comparative socio-economic indicators Namibia Comparative Socio-Economic Indicators Indicator Year Namibia Developing Countries Africa Developed Countries Charts Basic Indicators Area ('000 Km²) GNI per Capita (US $) 824. Popul. Living Below $ 1 a Day (% of Population) 2004 31.8 Percent.0 76.675.2 21.7 Population Growth Rate .Total 100 40 20 Environmental Indicators 0 0. Percentage of GDP Spent on Education 2010 8.5 Primary School .0 100.5 905..068.9 14.7 4000 Population Density (per Km²) 2012 2.0 3.0 Primary School Female Teaching Staff (% of Total) 2010 68.6 2004 9.658.284.0 .0 75.4 Total Population (millions) 2012 2.4 5.6 .568.8 .8 5.3 Infant Mortality Rate (per 1.0 Child Immunization Against Measles (%) 2011 74.0 101.628.6 Access to Health Services (% of Population) 2000 59.500.000) 2012 30.1 Incidence of Tuberculosis (per 100.8 53.4 -0.3 .0 Access to Sanitation (% of Population) 2010 32. Country Reports.8 .8 2. Population Growth Rate .000) 2012 25.7 0.8 34.3 Gender -Related Development Index Value 2007 0. Per Capita CO2 Emissions (metric tons) 2009 Sources : ADB Statistics Department Databases.5 40.1 4. .4 0.Female (%) 2010 89.0 42.2 140 Secondary School .5 2 1.5 0 2012 2011 2010 Namib ia Africa Health & Nutrition Indicators Access to Safe Water (% of Population) Physicians (per 100.0 99.0 1.3 38.8 43.8 Child Mortality Rate (per 1.0 0.068..3 39. .0 59. .1 2000 Labor Force Participation .3 120 Secondary School .4 53.3 Dependency Ratio (%) 2012 64.Female 2010 106.0 1000 Labor Force Participation .Male (%) 2010 88.6 1.9 8.Total (years) 2012 62.0 92.3 1.Total (%) 2012 40.2 8.6 53. ..8 101.688.0 5000 0 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Namib ia Africa Demographic Indicators Population Growth Rate .5 1 0.Total (%) 2012 1.Total (%) 2010 88.0 98.3 5.972.Female 2007 69. Child Immunization Against Tuberculosis (%) 2011 89. .. .3 Access to Safe Water (% of Population) 2010 93.5 .6 76. Primary School . UNSD.0 54.0 Births attended by Trained Health Personnel (%) 2007 81.8 Life Expectancy at Birth .0 99. 1.4 34.4 100 90 80 70 60 50 40 30 20 10 0 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 Namib ia Africa Education Indicators Gross Enrolment Ratio (%) Secondary School .6 6.7 Crude Birth Rate (per 1.a.Appendix I.780.4 70.8 77.6 0. .000) 2012 8.0 81.7 79. 80 Adult Literacy Rate . Adult Literacy Rate .5 60.548.0 . ..0 75..7 89.0 6.0 15.8 44. World Bank: World Development Indicators UNAIDS. UNDP.0 39.6 101.3 47.9 2003 8.3 440.000 people)* 2007 277.151.7 .3 2. 0.2 43.0 29..5 58.8 67.6 23..7 Public Expenditure on Health (as % of GDP) 2010 6.4 2.7 Population >= 65 years (%) 2012 3. Index (Rank among 169 countries) 2012 128.9 4.7 100.Female (%) 2012 46.9 100.9 158. of Adults (aged 15-49) Living with HIV/AIDS 2011 13.2 .0 Nurses (per 100.0 287.5 63.3 52.7 84.6 111.1 5.7 Urban Population (% of Total) 2012 39.4 80..6 99. Sex Ratio (per 100 female) 2012 98. .3 30.1 104.1 98.Urban (%) 2012 3. 60 Adult Literacy Rate .5 66.0 402.

60 0.12.29 68.12.26 0.09 30.8 3.05.12 0.00 Agriculture (OSAN) Transport (OITC) Institutional Support (OSHD) Institutional Support (ESTA) Private Sector (OPSM) MIC Fund MIC Fund Private Sector 07.07.5 MIC Fund 07.50 0.54 89.24 4.12 31.11 31.13 0.12.07.00 0.12 0.03.12 0.2 20.03.16 57.12 TBD 4.06.49 0.09 31.00 0 7.1 MIC Fund 09.12.08 13.10.13 0.5 Health (OSHD) MIC Fund 12.Appendix II.10 31.26 99.5% . Table of ADB’s Portfolio in the Country Project Name Support to Aquaculture Development Namibia Airport Study Human Resources Development Plan Statistical Capacity Building (SCB-II) TRUSTCO Finance MIC Grant Application for Establishment of the National Medical Benefit Fund Total Main Sector Window Approval Date Disburse Deadline Amount Approved (UA m) Amount Disbursed (UAm) Disbursed Rate (%) 05.59 0.

125. Equipment.Appendix III.400. Water. Housing. Disaster Management & HIV/AIDS Human rights and Democracy.16 Table Summarising Concessional Loans Subsectors / Programmes Commitments for 2011/2012 (N$) China Construction 177.000.808.273.00 Japan Transport 343.130.175. Gender Equality and Economic Growth USAID. Water Resource Management.69 401. Defence. Performance Management System.680.045. Immigration and Refugees Affairs.00 35. Capacity Building.469. Environment and tourism.016. Culture.168. Water Supply & Sanitation. National Integrated Resource Plan.984.207.423.179.000.53 . Construction. HIV/AIDS Fishery. Finance. Rehabilitation of Roads in the North. Open Africa North South Tourism Corridor 5. Capacity building & Health 132.00 91.861. Energy 285. Education & Training.00 256.800. Health. Civil Society Capacity Building Programme Namibia National Statistical System. Social Development. ICT. Health. Child Protection & Welfare. Land Reform. Community Forest. PEPFAR. Parliamentary Support Programme.00 Finland Fisheries 320.00 Spain Sweden USA Multilateral UN European Union World Bank GRAND TOTAL Development Partner Commitments for 2011/2012 (N$) 55. Roads.371. Health. Key Projects financed by the Bank and other DP in the country Table Summarising Grants Development Partner Subsectors/Programmes China Aquaculture.790. MCA.00 France Germany Social Development Fund. Emergency Preparedness and Impact Mitigation.53 TOTAL 1. Corridor Facilitation Programme.38 425. Environment Agriculture. MDG Initiative.300. Public Finance Management.09 1.00 Germany Transport. Education.00 20. Namibia Crisis Management Plan. Education. Decentralization. and Environment. Education.716. Transport.014. Environment and Climate. Governance National Parks. Gender Equality & Women Employment.685.161.374.933.000. Safety & Security. Skills Transfer and Capacity Development.752. Tourism. Governance. Public Finance Management Programme.216.096.

Map of the Project Area .Appendix IV.

Access to basic education. 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 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 (7.30x. the average DSCR is 2. For the new loan.expansion of the port of Walvis Bay. improve maternal health (MDG5). among others:. The project also includes a component on logistics and trade facilitation funded by a Bank MIC TA Grant. 1. Namibia has made significant progress in addressing many development challenges. Namibia maintains social safety net programs for the elderly.55x and the minimum is 1. 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.  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. and combat HIV/AIDS.  Is the project in a sector of priority under the Poverty Reduction Strategy?  Yes.82x. malaria and other diseases (MDG6).3% of total project cost).  Has there been progress in achieving the Poverty Reduction Strategy objectives?  Yes. rehabilitation and railway infrastructure management. disabled. Sound public policies are helping to lay the foundation for gender equality. The level of co-financing from donors is not significant relative to the national budget. the average DSCR is 3. The Government has in the past few years allocated between 8%-10% of the national budget to the transport sector. NDP4 has identified logistics.  Is the Government interested and actively involved in the implementation of the project?  Yes. . sick leave. and safe water is high and growing. and medical benefits to Namibians. and development and maintenance of national roads infrastructure.Annex I I.2 Country’s Financial Allocation to Sector  Is the country’s public expenditure allocation giving high priority to the sector concerned?  Yes. the severity of the HIV/AIDS epidemic is frustrating efforts to meet the Millennium Development Goals (MDGs) to reduce child mortality (MDG4). The sector is allocated NAD8.1 Country’s Commitment  Has the Government demonstrated willingness to participate in project financing by efficiently mobilizing Counterpart Funding?  Yes. The project is self-sufficient in debt servicing and no additional debt burden is expected to fall on the government. and war veterans. vulnerable children. Although Namibia is on track to meet the Millennium Development Goals on education. environment and gender. The development agenda of the Government is contained in the Fourth National Development Plan (NDP4). 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. This activity will involve different government stakeholders including the National Planning Commission and Ministry of Works and Transport during project implementation. For Namport.02x while the minimum is 1. and can therefore sustain additional debt. and has enacted a Social Security Act that provides for maternity leave. REVIEW OF COUNTRY PARAMETERS FOR ELIGIBILITY FOR BANK FINANCING 1. orphans. an analysis on its capacity to borrow for this project shows high debt service coverage ratios (DSCRs). primary health care services. Namibia’s debt levels remain sustainable. covering the period 2012/13-2016/17.2 billion over the Medium-Term Expenditure Framework covering the period 2011/12-2013/14 for. below Namibia’s 35% statutory debt-to-GDP threshold. For the existing loans that fully mature in 2018.

manufacturing and mining.5971 by the latest (2009/10) household survey. The Namibian dollar is pegged to the South African rand. with a Gini coefficient estimated at 0. which have left Namibia with a highly dualistic society. 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). Namibia’s per capita income of US$4. This selectivity stands are in stark contrast to previous NDPs. Namibia inherited a well-functioning physical infrastructure. agriculture and manufacturing (primarily through greater processing of primary commodities). and increased income equality are the three overarching objectives of NDP4. However income distribution is among the most unequal in the world. the GRN launched the Fourth National Development Plan (NDP4). Poverty incidence is high. broad strategies expected to achieve the outcome.7 billion Namibian dollars (NAD).2 Economic Overview Namibia’s economy is closely linked to South Africa’s economy through trade. and a relatively strong public administration. livestock and crop farming. basic civic freedoms.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. however.Annex II II. It proposes to achieve these objectives through industrial policies to stimulate growth in tourism. driven by construction. 000 jobs. Development Plans In July 2012. aimed at creating and retaining 104.5% of GDP between 2011/12 and 2012/13. and a ministry that will serve as the champion. compared to 69% in 1993. Atlas method) places it in the World Bank’s upper-middle income grouping. making economic trends (including inflation) closely follow those in South Africa. NAMIBIA . the fiscal deficit is expected to widen.700 (2011. totaling 14. rich natural resources.6% in 2010. 2 3 World Bank Country Overview – Namibia 2013 African Economic Outlook – Namibia 2012 . investment. the fiscal situation has deteriorated substantially. The deficit is financed by domestic borrowing and foreign debt.8%3. regional trade logistics. despite the expansionary fiscal policy. and respect for human rights. which will guide policies through 2017. a market economy. infrastructure. averaging nearly 6.2 percent for the years 2012 and 2013. and the business environment enter into NDP4 as “basic enablers” that support the economic priorities. health. but remain sustainable and below the 30% threshold. As a result. After years of fiscal surpluses arising from prudent macroeconomic policies. job creation. The country also inherited extreme social and economic inequities. NDP4 presents ten “desired outcomes. Reducing extreme poverty and improving education. The Namibian economy slowed down in 2011 with a GDP growth rate of 3. down from 6. although it has declined somewhat during the past decade: 29% of individuals had consumption below the national poverty line in 2009. Namibia’s debt levels have risen in recent years. and common monetary policies. reflecting the global economic crisis and expansionary policies to support growth. reflecting modest performances in mining and agricultural activities.” each accompanied by an indicator for measuring attainment of the outcome. whose agendas spanned the entire public policy space. Prospects for the medium-term remain favourable with GDP growth projected to continue on its path of recovery to an average of 4. good governance. Economic growth.

This is the maximum number of vessels that can be handled at present. The Port of Walvis Bay is Namibia's largest commercial port. The economic growth in the region exceeds that of most traditional markets and is the key to the company’s sustainability. 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. Revenue concomitantly also exceeded N$700 million. lack of harmonisation of trade policies and cumbersome border procedures. Namport’s opportunity and key differentiator remains in the SADC region. Europe and the Americas. 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. together with tariffs which are still competitive compared with their main competitors. receiving approximately 3.000 TEU’s4 and overall cargo volumes exceeding the 6 million ton mark for the first time ever. Angola and to a lesser extent South Africa). 4 Namport Annual Report 2012 -1- .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. 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. Germany (16%) and USA (4%) and exports Spain (27%). Mozambique. 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). Recent performance Namport achieved a record throughput of containers in 2012 of more than 337. The opportunity remains in expanding intra-regional trade which is currently well below potential due to poor infrastructure.Annex III III. 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. These enable Walvis Bay to take advantage of the congestion and poor productivity in Eastern and Southern African Ports (Tanzania. The main trading partner for imports are China (34%).

Port of Cape Town. 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. -2- . This allows it to pool resources and authorities of both transport regulators and transport operators. The largest carrier by trade capacity is Maersk with 38% market share. Durban (for the traffic generated by the Gauteng province via the trans-Kalahari) and Cogea for the transhipment traffic. they offer 73% of all trade capacity in this region with Maersk and CMA CGM being the most dominant. Dar es Salaam Port. Walvis Bay and Cape Town account for 80% of the region’s trade capacity. This enables the port to take advantage of the congestion and poor productivity in Eastern and Southern African Ports (Mozambique. Germany and UK (7% each). African Shipping Activity There are 24 container liner shipping operators in the West Coast of Africa region. Namibia has improved from position 102 (out of 148 countries surveyed) to position 75. 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.China (11%). Other ports considered include the ports of Lagos/Apapa. Transit traffic has also grown over the same period from 25. 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). In the past 7 years. namely. Transshipment traffic has grown from 92. 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. 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.000 TEUs to 65. This goes some way towards explaining Namport and Walvis Bay’s rapid improvement in another important shipping index: Liner Shipping Connectivity Index. right up to Ghana in West Africa.000TEUs with AAGR of 25%. 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. These 24 shipping lines operate 71 services to-and-from the region with a calculated trade capacity of 3 656 000 TEU’s annually. CMA CGM and MSC in order of their respective share of trade capacity. Although Cape Town is the closest South African port to Walvis Bay and therefore could be considered its main competitor. Out of South Africa’s eight ports. Combined. This trade is dominated by 3 large shipping lines: Maersk.000 TEUs in 2012 with an average annual growth rate (AAGR) of 55%. 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.000 TEUs in 2006 to 218. Transhipment demand relates to a broader. Some of the capacity issues that Namport experience are largely a result of the increasing transhipment business. The ports of Luanda. Whereas some of these ports mostly serve local import/export or transit. two are likely competitors for Namibian ports. It is a function of the hub-and-spoke distribution model. employed increasingly by the large international shipping lines. it handles a very small volume of transshipment and its capacity is limited. Port Elizabeth and Port of East London. 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. regional market and in Namport’s case to the development of the countries to the north of Namibia.

iv) Implementation of Development of Strategic Hubs  Development of logistics hubs based upon “National Logistics Master Plan”. 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. -3- . logistics competences and customs facilitation. The Strategic focus and mandate of the WBCG is: Business Development.  Optimise growth of transit as well as transhipment traffic via the Port of Walvis Bay. 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. it is time now to take full benefit of these facilities and to optimize their functioning.Caprivi. Urban Infrastructure).  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. in particular as compared with African standards. is aimed to promote development of corridor infrastructure. the main challenge is the improvement of cross-border facilitation procedures. Infrastructure Development. Namibia promotes several international transport corridors crossing the country mainly from the port of Walvis Bay. 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)). Even though the opportunity of developing such dry ports within the perimeter of the port where there is a serious shortage of storage areas.  The development of dry ports has started within the port of Walvis Bay. Namibian authorities are very proactive and significant progresses have been made to simplify and harmonize custom procedures. further promotion of trade facilitation (Single Window & Port Community System). may be questionable. in particular for dry cargo.  The development of a One-Stop Border Post (OSBP) is on-going on the main corridor (trans-Kalahari) as a “pilot project”. Johannesburg.  Development of regional urban centres based upon “Master plan on development of regional urban centres” (Land Use Plan. businesses and trade facilitation. In this regard. Many improvements have been made in the last few years on infrastructures. Logistics issues in Namibia relate more with international than with domestic traffics. v) Diversification of Industries  Attract diverse industries due to excellent position as an international logistics hub. Since Namibian roads along these transport corridors are still in relatively good condition.The Walvis Bay Corridor Group. a public and private sector collaboration. Trade Facilitation. Lubumbashi and Sao Paulo is increasingly drawing businesses through the Walvis Bay corridors. is governed by a Board of Directors drawn from the different public and private stakeholders within the transport and logistics sector.  Creation of the Walvis Bay Corridor Group (WBCG).  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. 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. Wellness service and Spatial Development Initiatives (SDI’S) for the Walvis Bay Corridors Logistics and Trade Facilitation International comparisons show that.

etc. The project implementation is 9 months spread over a period of three years. 2) design and implementation of a road safety assessments/audits. 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. 4) analysis of potential industries and business models. railway lines. The activity includes amongst others: 1) review of current situation of logistics. Namport has thus scheduled major rehabilitation of these structures to occur within the next 10 years. roads.000TEUs with adequate space for optimisation and future expansion. 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 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. 4) organize meetings with the authorities concerned and the public parties involved to ensure adequate cooperation. To date more than N$60 million has been committed to this project in conducting preparatory studies and investigations. and 5) disseminate information about the road safety action plans. 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 new container terminal will have a capacity of 650. to complement the 355.a. ship to shore quay cranes. 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.a. 2) analysis on prevailing business models of international logistics in SADC. 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 2030.000TEU p.Annex IV IV. giving the Port a total capacity of 1.050. 5) prefeasibility study on inland logistics park and on “One Stop Border Post”. 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. buildings. 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. 3) analysis of commodity flow service in Namibia. The new reclaimed land will be created by dredging/deepening the port and using the sand obtained from deepening to form the new land. paved areas.000TEU p. Once built. 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. 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 Interim Secretariat hosted by the WBCG will be supported by . The reclaimed land will be linked to the existing port land by a causeway. rubber tired gantry cranes. 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. A new modern container terminal will then be built on top of the newly reclaimed land and will consist of quay walls. The period of implementation is 9 months. capacity of the existing container terminal. 3) design and implement a monitoring system to measure the impact of the road safety action plan in the TCuC. The activity will include: 1) support WBCG for the design and implementation of a road safety action plan.

Digital Cameras. The activity includes: 1) Technical assistance during three years. The implementation is over a period of 3 years. Scanners. hosting of meetings. The target number of women to receive the FIATA training is 40 out of the 70 trainees. The activity will: 1) assess detailed training needs of registered freight forwarders in Namibia. 3) compile a report for future actions in promoting logistics competence among freight forwarders in Namibia. This activity will also cover coordination. Data Projectors and DVD Player / Recorders for the Committee. 2) provide minimum 70 freight forwarders with FIATA certified training. 2) travel & lodging. 3) organizing and participating in conferences / Workshops / Seminars to present WBCG project portfolio. . Scanners. 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. Priority in access to the training will be given to (i) female in-service freight forwarders. 4) Short-term trainings and 5) Procurement of Information Technology Equipment and Project Management Software. (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.providing technical assistance over a period of three years. Data Projectors and DVD Player / Recorders. 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. and Digital Cameras. travel and procurement of Information Technology Equipment and Software.

a business continuity plan. iii) iv) v) vi) vii) . that must among others entail a detailed waste management plan. and a detailed plan for better assessing and monitoring the socioeconomic impacts of the project. electricity. ii) A report on the analysis of the impacts of the project on services such as water. 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. An comprehensive Environmental and Social Management Plan (ESMP). a hazards (especially technological) management plan. A climate change adaptation plan for the project that is in line with the National Climate Change Action Plan. health services. 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. A report on the cumulative impact assessment for the project considering all other developments planned for the foreseeable future.Annex V V. A plan of how the inclusion of the projects workforce will be serviced by the currently existing HIV/AIDS programs.