AfDB approves $196mn loan to modernise Namibian freight railway infra

The Board of Directors of the African Development Bank Group (AfDB) has approved a loan of $196.43 million for Namibia to implement the second phase of its Transport Infrastructure Improvement Project (TIIP).

The loan, approved on 31 October 2023, represents 51.8 percent of the project’s total cost. The Namibian government will provide the remaining 48.2 percent.

The project aligns with Namibia’s long-term Vision 2030 to the country’s Namibia’s logistics value chain by tackling railway infrastructure bottlenecks. It will also help to strengthen the trade competitiveness of Namibia and the southern African subregion.

The project entails constructing 207 km of new rail track close to the existing line between Kranzberg and Otjiwarongo, using concrete railway sleepers and new rails. The works include constructing 16 bridges, renovating two stations, and procuring 55,000 tonnes of rails to build 518 kilometers of track. Other components include modernizing the railway signaling system along the Walvis Bay-Tsumeb line to improve its reliability, safety and capacity, as well as the overall performance of the railway system.

Recognizing the importance of good rail connectivity for bulk cargo, this TIIP Phase II would bring to 417 km the cumulative rail upgraded by the Bank after it supported a previous renovation for 210 km [Walvis Bay to Kranzberg] under the project.

Leïla Mokaddem, the bank’s director general for Southern Africa, said: “The project will maximize the benefits and be transformative for the competitiveness of Namibia and assist in attaining the Vision of the country becoming a regional logistics hub by 2030 while catalyzing development change in neighboring countries and the sub-region.” She added, “this project will also connect Namibia to Africa’s Copper Belt, and achieve regional railway connectivity.”

Having previously funded the expansion of the container terminal at the Port of Walvis Bay, the Bank is supporting integrating Namibia regionally by building critical port and rail infrastructure to connect the country to the rest of the region, move goods, support value chains and promote trade.

Most of the upgraded railway line crosses commercial agricultural land and many urban areas. Transporters, agricultural communities and industries along the corridor will benefit from faster commuting thanks to affordable, reliable, safe rail transport that will boost regional and national development. Road maintenance costs are also expected to reduce as bulk cargo transporters shift from road to rail.

The African Development Bank Group has been operating in Namibia since 1991. As at 30 September 2023, the Bank Group's active portfolio in Namibia was estimated at approximately $687 million, split among 10 operations in six sectors: transport (15.6 percent), finance (35.1 percent), multi-sectoral (18.1 percent), water (15.3 percent), agriculture (7.9 percent) and the social sector (8 percent).