WINDHOEK - Nedbank Namibia Corporate and Investment Banking (CIB) and Noric Otavi Steel Processing (Pty) Ltd this week signed an agreement for Nedbank to act as the lead arranger for the Otavi Steel Manufacturing Plant project in Otavi. According to the agreement, Nedbank will assist with the financial structuring of the project and facilitate the raising of both quasi-equity and debt capital for the N$2.7 billion project.
Speaking at the event, Nedbank Namibia Executive for CIB and Treasury, Karl- Stefan Altmann said; “At Nedbank Namibia, we continually strive to become Africa’s most admired financial services provider, with successful partnerships such as this one serving as inspiration to us along our way to achieve our goal. Acquiring deals such as this continues to solidify our capabilities as a bank and aptitude for significant finance deals.”
The two shareholders of Noric Otavi are the Namibian company, Otavi Rebar Manufacturing (Pty) Ltd (ORM) and the Swiss-based company, Noric Swiss GmbH. Noric will also be the EPC (Engineer, Procure and Construct) contractor as well as the plant operator and take full responsibility for the planning, design, provision of technology, construction and operation of the plant. Namibian contractors will be appointed as sub-contractors for the construction of all the work that can be done locally according to Adriaan Grobler, Director of Lithon Project Consultants, consultants on the project, and also a Director of Noric Otavi.
The project entails the development of a 300 000 ton per annum long product mini-mill steel manufacturing plant where scrap steel is used as primary input and basic steel products (rebar and steel sections) are produced for the construction industry. It involves receiving scrap and sorting the scrap, which is then fed into an electrical arc furnace that melt the scrap from which billets are casted and fed to a rolling mill that produces the different steel profiles and products.
The socio-economic impact of the project on Otavi town is expected to be significant according to the Mayor of Otavi, Martha Shipanga, as it will create 350 permanent jobs and with an annual estimated revenue of eventually N$2 billion, will further stimulate other economic activities and development. The population of Otavi is expected to double over the next two years when construction is estimated to be completed and operations begin. Otavi Town Council has already made provision for additional industrial plots for supporting industries, as well as 1 500 new residential and other plots next to the new industrial area. She further stated that the Otavi Town Council has provided 77ha of land, through a Public Private Partnership for the project and is also a shareholder in the project. The project will substantially increase their revenue stream from the dividends and be able to develop Otavi even further by investing their returns back into the town.
“It is worth noting that the fruits of this project reach far beyond the just over 4000 inhabitants of the northern Namibian town. The development of a steel manufacturing plant, will not only serve to benefit the town of Otavi, its benefits are wide reaching and flow across our borders into neighbouring countries such as Angola, Zambia, Zimbabwe and Botswana,” Altmann stated.