In an effort to increase the agricultural sector’s contribution to the country’s economic growth in the coming year, Agribank and Development Bank have signed a memorandum of understanding to ensure more collaboration between the two entities.

The Agricultural Bank of Namibia (Agribank) and the Development Bank of Namibia (DBN) have signed a memorandum of understanding (MoU) to cooperate and co-finance controlled environment agriculture activities in Namibia.

The signing took place on 1 December 2022, in Windhoek.

The MoU recognises the joint interests of the two banks in promoting agriculture as a route to economic activity and food security.

Agribank promotes agriculture through financing the entire agriculture value chain and related activities, while DBN provides finance for agricultural infrastructure, manufacturing of agricultural inputs and provision of agricultural services, as well as enterprises that process agricultural produce and manufacture food.

Controlled environment agriculture finance envisages provision of land and facilities that enable consistent productivity with infrastructure that reduces the impact of drought and variable weather.

This may include hydroponics, vegetable tunnels and green schemes. It also encompasses aquaculture.

In terms of the MoU, the banks will also identify parallel opportunities of mutual interest. For instance, if DBN receives a request for direct financing for agriculture it will refer the request to Agribank.

Agribank may similarly refer requests for financing for agri-processing facilities to DBN. But both banks may collaborate on finance for controlled environment agriculture.

At the signing ceremony, Agribank’s Chief Executive Officer, Dr Raphael Karuaihe, said “collaboration with other institutions to pool financing resources speaks directly to the Bank’s strategic initiative of targeting high impact projects to transform our economy and the agriculture sector, in particular.”

DBN CEO Martin Inkumbi stated that DBN has identified controlled environment agriculture to focus on, “as this industry inherently mitigates many of the risks usually associated with agriculture, and with limited background in agriculture, it greatly reduces the risk DBN has to mitigate and manage in the agricultural space.”

The Memorandum of Understanding is valid for two years from the date of signing, with the option for renewal at the end of the term.

In the photo: Agribank CEO Dr Raphael Karuaihe and DBN CEO Mr Martin Inkumbi after signing their ‘work-together’ agreement.