In Namibia the greatest challenge to the PPPUE Programme has been how to effectively mobilize resources from the private sector. The issue of private sector involvement reminds of the 'chicken and egg' dilemma: the private sector is ready to step in only when the partnership arrangement is established.
The MRLGH has a responsibility and an interest in ensuring that the private sector gets involved. If the process is set in motion local authorities will be able to mobilize their own resources. In this regards, the MRLGH has created a platform to facilitate private sector involvement. Also, building relationships between the members of the Steering Board has been an essential component of the PPPUE Programme. The relationship has improved and as a result the private sector seems to be more willing to get involved and even support pro- poor initiatives. The Programme collaborative efforts with the private sector have also started to yield the desired dividends from the financial sector. Compilation of business and financing plans by pilot local authorities has helped to give direction for the engagement of the financial sector.
There is a perception that small local authorities have a lot of risk factors and hence their creditworthiness cannot be guaranteed for viable lending facilities. To win the confidence of municipal infrastructure lending agencies in Namibia, the PCU has started collaborating with the Old Mutual MIDINA (Municipal Infrastructure Development Investment Assistance) Fund. The idea is that the partnership between the PCU and the Fund will enable them to work together and conduct joint analyses to assess the risk factors associated with the investment support need identified so that capacity building interventions can be put in place to cope with such risks before disbursements are done. The conditions set by Old Mutual MIDINA Fund may however require central government guarantees, ring fencing of revenue from such PPP ventures, and monitoring and performance support systems to enhance effective administration and repayment schedules.
In all pilot local authorities when there are elements of infrastructure development the intervention of the MRLGH is considered as essential. The MRLGH may need to support some of the pilot towns with capital funding to enhance the implementation and completion of the pilot projects. It is however envisaged that the private sector will inject resources when pilot projects are completed and publicized.
Concerning community involvement, in all pilot local authorities concrete steps have been taken to ensure that community groups and representatives are actively involved in the formulation and implementation of PPP arrangements. Community consultation and participation are a key element of the PPPUE Programme in Namibia.