Development Bank of Namibia
Presentation to AFRECO
26 November 2020

About the Bank

Development Bank of Namibia

o Established 2004 (Development Bank ofNamibia Act)o Government of Namibia is sole shareholder
o Large enterprises, infrastructure & SMEs
o Pioneers new forms of lendingo Develops financial markets
o Transformative lending to address persistenteconomic issues

Mandateo Primary objectives• Mobilise public and private financial

resources, nationally and internationally• Appraise, plan and monitor implementationof development plans• Enable private sector and community
participation in development• Assist development of money and capital
markets.

o Secondary objectives• Cooperate with other DFIs to develop an
integrated finance system• Assist public and private sector to manage
specific funds

Governanceo Governance through board and executive
committees

o Robust risk managemento Strong due diligence on loanso Post-lending managemento Tracking of development impact
o Environmental and social managemento Focus on continuous improvement

Partnerships for development finance(benchmarking and funding)o SADC DFI Networko African Development Bank (on-lending ofconcessional loans)

o KfW (on-lending of concessional loans forclimate adaptation)o NSX-registered bond programmeo Industrial Development Bank (South Africa)o Development Bank of Southern Africa
o NORSADo Credit Guarantee Scheme (commercial banksand National Special Risks InsuranceAssociation)

Lending portfolioo Large enterprises & infrastructureo Ring-fenced SME lendingo Lending to address development needso NDP5 sector focus• Manufacturing• Transport and logistics• Tourism & hospitality• Infrastructureo Transformative lending• Inclusiveness• Women & youth• Skills-based entrepreneurial development

Development Bank of NamibiaSME Centreo Finance for SMEs
o Employment creationo Development of enterprise ecosystemo Transformational lending• Previously disadvantaged Namibians• Women entrepreneurs• Young entrepreneurs

Showcase projects

National Energy Fund (NEF)

o Strategic Fuel Storageo Extension of Namibia’s fuel storage capacityfrom 1 month to 2 monthso Financed by DBN with concessional capital fromAfDBo Proxy governance of funds during project onbehalf of NEF

o Risk mitigation and supervision by ProjectPreparation Fundo Value: N$4.2 billion

Omburu Solar Photovoltaic Parko Pioneering finance for independent power
producer (IPP) and renewable energyo Namibian partnership with French companyo Multiple solar parks and one wind farm followedo Relieves shortage of electricity through PPP
model with electricity buyers

o Value: N$ 84 million

Ohorongo Cemento Equity participation (minority shareholding)o Majority shareholder: Schwenk Zement(German parent)o Establishment of cement planto Secures local production of cemento Equity participation with Industrial

Development Corporation (IDC) andDevelopment Bank of Southern Africa (DBSA)

o Value: N$83 million

Pulsar Electronics

o DBN Innovation Award Winner & showcase
projecto Manufacturing of remote electricity meter
management and wi-fi router

o Supports electricity saving and internet accesso DBN assistance with product prototyping andbusiness modelo N$500,000

Programmes ~ past and ongoing

Bond programme

o N$2.5 billion bond subscription programme
listed on Namibian Stock Exchangeo Deepen private sector participation indevelopment (governance by proxy)o Extend range of Namibian investment
mechanismso First bond settled

Project Preparation Fundo Activities to prepare major enterprises forbankability

o Demand studies
o Risk mitigationo Environmental and social managemento Supervision of complex projects

Credit Guarantee Schemeo Increase access to finance for SMEs
o Component of SME Financing Strategy (includes
Mentoring & Coaching Programme and Venture
Capital Fund)o Smart partnership to reduce commercial bankcollateral requirements for SMEso Scheme provides collateral cover of up to 60%
o One participating banko More banks expected to follow

Skills-based finance for young entrepreneurso Alleviate shortage of trade and technical skills forenterpriseso Develop professional services
o Future pool of entrepreneurso Employment creationo No collateral requirement at applicationo Assets financed serve as collateralo Reduced borrowing floor: N$50,000

Economic recovery and Covid-19

Government of the Republic of Namibia
Policies and institutions for Covid-19 support

o Onset 13 March 2020
• 13,500 cases *• 12,680 recoveries *• 138 deaths *o Rapid responseo Emergency income grant: N$562 milliono Social Security Commission• Salary protection: N$150 million• Contribution waiver: N$142 million• SME & domestic workers: N$32 million• N$5oo million business relief (DBN)• N$352 million agriculture relief (Agribank)* at 14 November 2020

Economic recovery

o Economic impacts of• Covid-19 interruption• Multi-year recession• Prolonged drought
o Government developing economic recovery plan,
based on recommendations of:• 2019 Economic Growth Summit• High Level Panel on the Namibian Economy

Covid-19: DBN immediate responseo Repayment holidays• Tourism sector: N$33.8 million• SMEs: N$35 million• Lengthen term of loans to offset interestrecapitalizationo Grant funding support from a bilateral partner
to waive interest accruing from April toDecember 2020 for most affected clientso Priorities• Preserve existing clients• Extend relief to new borrowers• Enhanced portfolio management
o Additional N$500 million business relief lending
to be administered by DBN

o Sourcing concessional funding to onlend tostruggling businesses

Covid-19 recovery and post-recovery programmes

Ongoing projects requiring support

o Focused on Covid-19 recovery and previously
planned before for economic recovery

o Ongoing SME Support• Improve access to finance for SMEs
• Mentoring & Coaching (improvesustainability of SMEs with knowledge,experience and capacity building)• Venture Capital Fundo Affordable housing• Continuing support of affordable housingand land development• New housing models and financeNew initiatives

o Controlled environment agriculture• Agro-processing• Reduce impact of droughts• Improve food securityo Climate adaptation• Reduce impact of climate change• Water consumption reduction• Heat reduction• Focus on National Development Plansectors• Socio-economic wellbeingRelationship and mutual supportRelationshipo Mutual understandingo Mutual respecto Mutual benefit
o Memorandum of Understanding informed bystudy of opportunities and goals

Mutual support

o Opportunities for finance of Japaneseenterprises registered in Namibia

o Opportunities to co-finance projects withJapanese development partnerso Administration of funds advanced by Japan fortargeted economic activity, e.g. Mentoring &Coaching Facilityo Transfer of skills from Japan

Financial statements available atwww.dbn.com.na/annual

Thank you.