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

According to a joint statement from the banks, the agreement, signed at the beginning of December, recognises the joint interests of the two banking institutions 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,” said the statement.

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, the statement added.

In terms of the agreement, the banks will also identify parallel opportunities of mutual interest.

“For instance, if DBN receives a request for direct financing for agriculture it would refer the request to Agribank and Agribank may similarly refer requests for financing for agri-processing facilities to DBN. Both banks may collaborate on finance for controlled environment agriculture,” the statement said.

At the signing ceremony, Agribank’s chief executive officer, Raphael Karuaihe, said collaboration with other institutions to pool financing resources spoke directly to the bank’s strategic initiative of targeting high-impact projects to transform Namibia’s economy and the agriculture sector, in particular.

DBN CEO Martin Inkumbi said the DBN has identified controlled environment agriculture to focus on, as this industry inherently mitigated many of the risks usually associated with agriculture, and with limited background in agriculture, it greatly reduced the risk DBN had to mitigate and manage in the agricultural space.

The agreement is valid for two years, with an option for renewal at the end of the term. – email: [email protected]