NAMIBIA BANK EXTENDS FINANCIAL GUARANTEE TO POWERCOM
The Development Bank of Namibia (DBN) has announced four new projects it is financing, to a total value N$36.75 million, with N$30.5 million of that amount going to new mobile phone operating company PowerCom.
The remaining N$6.25 million is to be divided between Edu-Loan Namibia (N$4.75 million), Enviro-Fill Namibia (N$1 million) and Wendjizuva Pharmacy (N$500 000).
Announcing the new loans DBN Chief Executive Officer, David Nuyoma, said the projects the DBN is funding are very diverse, but share features that makes the bank proud to be associated with them.
At a media briefing yesterday, he said DBN extended a six-month guarantee facility of N$30.5 million to enable PowerCom's bankers to provide letters of credit for the shipment of equipment.
Nuyoma said DBN is excited about the PowerCom project because, apart from creating 75 direct jobs, the mobile industry generates substantial economic benefits in terms of its contribution to GDP.
The mobile phone industry, he added, also generates employment and government revenue through payment of various taxes and increased competition in the telecommunications sector.
PowerCom was only recently granted a 15-year license to operate a mobile phone service in Namibia, which requires it to build a nation-wide network providing coverage to 95 percent of the populated areas of the country within a five-year period.
Managing Director of PowerCom, Mac Allman, said he was very excited about the company's collaboration with DBN, as the bank would become the first new source of funding for the company after the original shareholder capital.
Despite the shock-news that Telecom Namibia is surreptitiously entering the mobile phone market with its new Switch service, an upbeat Allman said he "absolutely still believes in the Namibian market".
He pointed out that original projections for the mobile phone market in South Africa were 25 per cent market penetration, but today market penetration for mobile telephony in South Africa stands at 75 percent.
Allman could not see why the same market penetration could not be achieved in Namibia, with PowerCom capturing a significant amount of the new market.
For the first time however, the PowerCom MD conceded that the company will not be able to roll out its new service as early as it planned.
He disclosed that the original planned launch of the service in early December would now be delayed until the actual start of the Christmas holiday period.
"It became clear to us that we need to make sure we are going to be able to have absolutely top quality service. We are not going to launch the system until I am sure the system is rock solid," he vowed.