Cold Storage Port Facilities for Agri-Produce
Business Model Description
Develop cold storage facilities at the port of Walvis Bay (and others, as emerging) for agri-produce to create a temperature controlled supply chain.
Expected Impact
Position Namibia as a transshipment gateway providing high quality and affordable produce for Southern African Development Community (SADC) markets.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.
The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.
Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
Country & Regions
- Erongo Region
- ǁKaras Region
Sector Classification
Food and Beverage
Development need
25% of Namibia's population is food insecure (II), including due to persistent drought situations (IV) and the country's farmers facing challenges to access affordable financing (V). SDG 2 on Zero Hunger is "stagnating" and faces "major challenges" in Namibia (I).
Policy priority
As captured in Namibia's 5th National Development Plan (NDP5), the Government seeks to transition from a provider of live animals to exporting value-added agricultural goods, and increase food and livestock production by 30% and 10% in 2022 (II). Although the agriculture sector only contributes 3-5% to GDP, it is a Government priority as it employs 23% of its population (III).
Gender inequalities and marginalization issues
The majority of the 167,242 jobs in Namibia's agriculture sector are within rural areas of the country. Only 21.1% of the workforce is female (III), signaling a major opportunity to provide additional income generation opportunities for women.
Investment opportunities introduction
Agriculture, among others, generates significant multipliers: an increase in final demand of NAD 1 million (USD 72,000) for traditional agriculture is likely to generate an output twice that value as well as GDP and income for roughly the same value (VI). This is expected to lead to the development of Namibia's economy and result in poverty alleviation (V).
Food and Agriculture
Policy priority
Namibia's Government focuses its efforts for greater food security on developing the agro-processing industries by utilizing local produce and strengthening regional value chains, as well as increasing the agricultural production for cereals, horticulture and livestock (II).
Gender inequalities and marginalization issues
An increase in final demand for traditional agriculture is expected to generate the highest impact among low-income households in Namibia, benefitting marginalised communities and women, among others (VI).
Agricultural Products
Pipeline Opportunity
Cold Storage Port Facilities for Agri-Produce
Develop cold storage facilities at the port of Walvis Bay (and others, as emerging) for agri-produce to create a temperature controlled supply chain.
Business Case
Market Size and Environment
Namibia requires 12,500 tonnes of additional cold storage capacity to serve market potential.
Namibia currently has a cold storage capacity of 12,500 tonnes; the country's market potential necessitates ramping up the capacity to 25,000 tonnes (10).
The total container throughout capacity overall increased by 10%. In 2020 / 2021, the ports of Walvis Bay and Lüderitz handled 135,194 TEU’s (20-foot container boxes), which is a 10% increase in comparison to the 128,779 TEU’s handled in 2019 / 2020 (9).
Zambia, Angola, Democratic Republic of Congo, Botswana and Zimbabwe are the main markets for transit cargo by volume at the Walvis Bay port (9).
Indicative Return
15% - 20%
A benchmark project, the Meatco's Okahandja Abattoir, achieved an IRR of 15-20% as a major driver of its repurposing into a cold storage facility (11).
Investment Timeframe
Medium Term (5–10 years)
While no agri-produce cold storage facilities (excluding for fish) exist at ports and no empirical data is available for investment timeframes (19), loans suitable for cold storage port facilities, offered by FNB, Bank Windhoek and the Development Bank of Namibia, have a tenure of 5-10 years (12).
Market Risks & Scale Obstacles
Market - Highly Regulated
Impact Case
Sustainable Development Need
Namibia lacks adequate storage facilities that allow for agricultural value addition. Cold storage facilities needed to maintain the lifespan of fresh produce are limited, which results in raw products being exported and re-imported into the country for value addition (5).
In order for Namibia to leverage AfCFTA opportunities, it needs to become a commercial gateway where refrigerated container trade involves the imports of food products for landlocked African markets. The level of refrigerated container activity is related to market size and economic development (1).
Gender & Marginalisation
Smallholder farmers are excluded from enhanced market opportunities when value addition takes place outside of Namibia.
Expected Development Outcome
Reduced losses of perishable products thanks to increased access to storage facilities (3).
Enhanced port traffic and revenue, and improved strategic logistical significance of Walvis Bays port in the region, leading to generally greater economic activity in Namibia.
Gender & Marginalisation
Smallholder farmers, who tend to be marginalised and suffer most from limited economic opportunities, obtain access to national and international markets and operate with greater productivity.
Primary SDGs addressed
9.1.2 Passenger and freight volumes, by mode of transport
2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size
Secondary SDGs addressed
Directly impacted stakeholders
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
People
Public sector
Outcome Risks
Cold structure infrastructure requires significant energy, which can strain the already limited grid capacities and generate negative environmental impacts if not managed and sourced sustainably.
Impact Risks
Competitiveness depends on expansion and strategic direction of the Walvis Bays port, which is steered by the Namibian Ports Authority (NamPort) and may limit the impact of the opportunity.
Impact Classification
What
The outcome is likely to be positive, important and intended because cold storage port facilities are a critical component of logistics hubs and can position Namibia as a transshipment gateway.
Who
Commercial farmers benefitting from integration into regional value chains, and regional importers, exporters and retailers benefitting from high quality and affordable produce.
Risk
While the cold storage technology is readily available, the model's viability depends on cargo volume and the strategic direction of the Walvis Bays port, which is beyond control.
Impact Thesis
Position Namibia as a transshipment gateway providing high quality and affordable produce for Southern African Development Community (SADC) markets.
Enabling Environment
Policy Environment
Food and Nutrition Policy, 1995: Promotes the maintenance of strategic grain reserves by the private sector through a combination of storage alternatives at national, regional and farmer levels (13).
Food Safety Policy, 2014: Ensures food safety for all consumers, and provides sufficient food safety guarantees on all food products traded nationally or exported to other countries (14).
Financial Environment
Fiscal incentives: In 2020, the Ministry of Finance removed all fiscal incentives. The Ministry of Industrialization and Trade is negotiating for a new regime with the Ministry of Finance. The Investment Promotion and Development Board facilitates the conclusion of the incentives (20).
Regulatory Environment
Cold Storage Works and Abattoirs Proclamation, 1921: Guides the construction and operation of cold storage infrastructure and defines requirements also for export of produce (15).
Namibia Ports Authority Act, 1994: Provides for the establishment of the Namibian Ports Authority to undertake the management and control of ports (16).
Atmospheric Pollution Prevention Ordinance 11, 1976: Provides for the prevention of the pollution of the atmosphere, and for matters incidental thereto (17).
Marketplace Participants
Private Sector
Investors such as the Development Bank of Namibia, the Namibian Industrial Development Agency (NIDA) and Agribank. Fund managers with a mandate in agribusiness and infrastructure, such as Musa Capital Namibia; Ino-Harith Capital; EOS Capital and Mergence Namibia Infrastructure Fund.
Government
Namibian Ports Authority (NPA), Namibian Ports Authority (NamPort), Ministry of Agriculture, Water and Land Reform, Namibian Agronomic Board (NAB).
Public-Private Partnership
Walvis Bay Corridor Group (WBCG) is a service and facilitation centre to promote the benefits of using the Walvis Bay corridors through the port of Walvis Bay to and from southern Africa (18).
Target Locations
Erongo Region
ǁKaras Region
References
- (I) SDG Center for Africa and Sustainable Development Solutions Network, 2019, Africa SDG Index and Dashboards Report 2019, Kigali and New York: SDG Center for Africa and Sustainable Development Solutions Network, https://sdgcafrica.org/we-content/uploads/2019/06/SDGS_INDEX_REPORT_2019WEB.pdf. II) Republic of Namibia, National Planning Commission, 2017, Namibia's 5th National Development Plan (NDP5), https://www.npc.gov.na/?wpfb_dl=294. III) Martha Nangolo & Ndapwa Alweendo for Institute for Public Policy Research (IPPR), 2020, Democracy Report. Agriculture in Namibia: An Overview, https://ippr.org.na/wp-content/uploads/2020/02/Agriculture-in-Namibia-An-Overview.docx-10.pdf. IV) Republic of Namibia, National Planning Commission, 2018, Implementation of Sustainable Development Goals, Voluntary National Review, https://sustainabledevelopment.un.org/content/documents/19880New_Version_Full_Voluntary_National_Review_2018_single_1_Report.pdf. V) Republic of Namibia, National Planning Commission, 2018, Is Agricultural Productivity an engine for growth, https://www.npc.gov.na/?wpfb_dl=357. VI) DNA Economics, 2021, SAM Multiplier Analysis for the SDG study in Namibia, Six Capitals.
- (1) Port Economics, Management and Policy, 2020. Chapter 8.5 – Port Cold Chains, https://porteconomicsmanagement.org/pemp/contents/part8/port-cold-chains/#3_Reefer_Terminal_Facilities.
- (2) Republic of Namibia, National Planning Commission, 2017, Namibia's 5th National Development Plan (NDP5), https://www.npc.gov.na/?wpfb_dl=294.
- (3) Republic of Namibia, Ministry of Trade and Industry, Growth at Home, Namibia’s Execution Strategy for Industrialization, http://www.mti.gov.na/downloads/GrowthinNamibia.pdf.
- (4) FAO, 2016, Agroindustry Policy Brief 2, Developing the cold chain in the agri-food sector in sub-Saharan Africa, http://www.fao.org/3/a-i3950e.pdf.
- (5) Republic of Namibia, Namibia Statistics Agency, Namibia Census of Agriculture 2013/14, https://d3rp5jatom3eyn.cloudfront.net/cms/assets/documents/Namibia_Census_of_Agriculture_2013_14_Revised_Report.pdf.
- (6) The Research Department of the Bank of Namibia, 2017, 18th Annual Symposium: Feeding Namibia: Agricultural Productivity and Industrialisation, https://www.bon.com.na/CMSTemplates/Bon/Files/bon.com.na/52/52c35978-5912-4429-9052-3c8f5cc7971e.pdf.
- (7) EOS Capital, 2021, About EOS Capital, https://www.eoscapital.com.na.
- (8) Old Mutual, 2021, Investing in Infrastructure, https://www.oldmutual.com.na/old-mutual-investment-group/alternative-investments/midina.
- (9) Namibian Ports Authority (Namport), e-Newsletter, 5 March 2021, https://www.namport.com.na/news/907/Namport-e-Newsletter.
- (10) Namibian Ports Authority (Namport), 2021, Namport continues to be the preferred seaports in Africa, https://www.namport.com.na/news/907/Namport-e-Newsletter.
- (11) Monasa / UNDP interview with Meat Cooperation of Namibia Ltd for developing the Meatco Strategic Plan 2020-2025, 2019.
- (12) Development Bank of Namibia, 2020, Product Guide Sheet, https://www.dbn.com.na/phocadownload/DBN-Products-V2020.pdf.
- (13) National Food Security and Nutrition Council, 1995, Food and Nutrition Policy of Namibia, http://www.nafsan.org/wp-content/uploads/2020/08/National-Food-and-Nutrition-Policy-Namibia_1995.pdf.
- (14) Food Safety Policy, 2014, Republic of Namibia, https://www.atf.org.na/issues/article.php?blogID=27.
- (15) Cold Storage Works and Abattoirs Proclamation, 1921, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=12.
- (16) Namibia Ports Authority Act, 1994, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=199.
- (17) Atmospheric Pollution Prevention Ordinance 11, 1976, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=430.
- (18) Walvis Bay Corridor Group, 2021, Walvis Bay Corridor Group: About us, http://www.wbcg.com.na.
- (19) Monasa / UNDP interview with the Ministry of Industrialisation and Trade (MIT), 2020.
- (20) Monasa / UNDP interview with Ministry of Industrialization and Trade, 2021.