Finland's objectives of the Development Cooperation are based on the Millennium Development Goals (MDG) with an overall aim of alleviation of widespread poverty. Special attention is given to Prevention of global environmental threats, promotion of equality, human rights and democracy, increasing global security and economic interaction.
In Namibia Finland is phasing out the long-term grant based bilateral development cooperation and taking into use other cooperation instruments including trade and commerce, tourism and institutional cooperation.
During the 15 years of independence of Namibia, Finland has been involved in Rural Water Supply, Health, Good Governance, Forestry, Mapping (linked to the mining sector), Sustainable Environmental Development and Decentralisation. During the past two years, it has been a priority to finalise the projects in a sustainable manner.
The last bilateral project Support to the Namibian Decentralisation Process, started on 1 October 2004. Its objectives are to support Regional Councils and Line Ministries in their Decentralisation Process. The project covers all 13 Regional Councils and 9 Line Ministries. The Finnish funding for the Project is 6 million euros, while the Namibian part of the funding amounts to 8 million Namibian dollars.
An important part of the Finnish Development Cooperation includes a continuous cooperation with other donors in Namibia, such as the cooperation with France in the decentralisation. In addition, cooperation with European Commission is regular.
Regional projects through the SADC and NEPAD are possibilities for the cooperation between Namibia and Finland. Here the cooperation with other donors is important and beneficial.
Consessional Credits is a new Finnish Financing Instrument in Namibia. Concessional Credits can be used in Namibia, because it is categorised as a Lower Middle Income Country. Projects must be in line with the Namibia's Poverty Reduction Strategy and they should reduce poverty through favourable economic, social and environmental development.
Concessional Credits are granted only to projects that are commercially non-viable. Most of the Concessional Credit projects are on the public sector.
The credit amount is 100 % of the contract amount and the interest rate is 0 %. The repayment period varies between 10 to 15 years. The interest subsidy is paid out of Development Cooperation Budget of Finland. The Consessional Credits are granted by the Ministry for Foreign Affairs of Finland, and the Credits are guaranteed by Finnvera LTD (the official Export Credit Agency of Finland). All Banks and Financial Institutions operating in the European Economic Area are eligible to act as lenders.
The Ministry for Foreign Affairs of Finland provides technical assistance during the preparatory phase, planning and procurement process. The Finnish content and interests must be significant in the proposed project. Moreover, Finnish know-how and technology should bring additional value to the development of Namibia. The project should represent a business sector in which Finnish companies can offer know-how and technology that particularly benefits the partner country. Credit Applications are considered individually, on a case by case basis by the Ministry for Foreign Affairs.
The Concessional Credits have not yet been used in Namibia. The Memorandum of Understanding between Namibia and Finland on Concessional Credits is under preparation (December 2005).
The EIT-appropriation is a funding instrument provided by the Ministry for Foreign Affairs of Finland. The allocation is directed to economic, industrial and technological projects in the developing countries. EIT-appropriation is intended for setting up of long-term commercial cooperation projects. Eligible applicants for the EIT-appropriation are Finnish companies and institutions that are not financed through public funds. The priority will be given to those applications of Small and Medium size Enterprises, which include new product, new process, new markets and Finnish know-how. EIT-appropriation is available for feasibility studies, training, acquiring expertise services and planning costs. Additionally, EIT-appropriation will not be granted for single market studies, seminars or visits. The share of the allocation does not normally exceed 50 % of total costs of project.
Finnfund provides Equity Investments, Investment Loans and Mezzanine Financing. Equity investments are made directly (or through a holding company) into the project company, as well the investment loans. Maturity is normally formed 5 to 7 years and a grace period is of 1 to 2 years. The repayment schedule is tailored to suit the project. Portion to be financed by Finnfund does not usually exceed 1/3 of the total financing need.
The Nordic Investment Bank (NIB) is a joint international financial institution of the Nordic countries. NIB finances both private and public projects. Investments furthering the Nordic economic co-operation have high priority. The core of the NIB's international lending operations consists of project investment loans (PIL), which are granted to governments, or against a government guarantee, for high-priority projects of mutual interest.
In Namibia, which has been identified as a so-called Transition Country, the aim is to maintain and continue the cooperation between the Finnish and Namibian authorities when the projects and the Transition Period are over. At the same time, the objective is to strengthen the cooperation in Economic, Trade & Commerce and Research Sectors.
Through Institutional Collaboration, which includes projects or programmes, a Finnish Institution, University or Research Institution has cooperation with a Namibian Peer Institution. The activities carried out are part of the Institutions' normal planned Internationalisation, and benefit both parties. Further, the Research Institutes can have an Exchange Programme for researchers, or common Research Programmes and Universities can have Exchange Programme for lectures and share common Curriculum.
There are already different types of Institutional Cooperation programmes in operation in Namibia.
