FNB offers loans for land servicing
FNB Namibia has introduced a financing facility to help municipalities and town councils fund infrastructure required to make land available for development.
The facility, known as the Land Servicing Value Proposition, provides medium-term loans to local authorities to cover the costs of installing roads, water, sewerage and electricity infrastructure.
The financing is aimed at addressing a key constraint in Namibia's land delivery process, where municipalities often own land earmarked for development but lack the capital to service it.
Local authorities have traditionally relied on land allocation arrangements involving developers to finance servicing costs. However, developers typically recover these expenses, alongside their margins, through plot selling prices, potentially increasing the cost of land.
Under FNB Namibia's financing model, local authorities borrow directly to fund infrastructure development and retain ownership and control of the land. Loan repayments are made progressively from proceeds generated through plot sales rather than monthly municipal operational budgets.
FNB Namibia's Head of Public Sector Banking, Hans Bolle, said limited funding for infrastructure remained a major obstacle to making land available for development.
"The challenge is often not the availability of land, but the funding required to install the infrastructure that makes it ready for development," he said.
The facility offers loan terms of up to three years, depending on project requirements and anticipated sales timelines. Funding is subject to credit assessment and relevant regulatory approvals.
The model is intended to support the development of residential, commercial and industrial land, with the latter potentially creating opportunities for business investment and employment.
Municipalities and town councils interested in the facility can approach their FNB Namibia relationship managers.
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