Namibia is a country widely regarded to be at the forefront of community-based conservation in Africa, but it is a movement that has been financed almost solely by donor funding.
With Namibia’s recent progression to ‘upper middle income’ (UMI) status, access to such funding, particularly from bilateral sources, has become more difficult. This presents a new and significant risk for the future sustainability of this sector.
This investment supported the extension and enhancement of Grootberg Lodge - a tourism facility, originally constructed using EU donor funds, whose earnings lie at the heart of a pioneering community-driven conservation initiative within an extensive and high value conservation landscape in the north-western part of the country. The 2,000 member, 850,000 acre Khoadi-Haas conservancy was the first in Namibia to independently exploit new legislation in the mid-1990s that permitted local communities to establish rights over wildlife and tourism through the formal creation of conservancies – and is now the first to have used commercial finance (this transaction was the first of its kind to be approved by the Bank of Namibia) as a means of further developing its underlying economics. As in all African Wildlife Capital transactions, conservation covenants were used to build further on the commitments that have already been developed for using this tourism facility as an important conservation and social development tool.
The Investment: African Wildlife Capital provided US$ 245,000 of funding structured as a 0% interest loan but with rights to a 1.1% revenue royalty over 8 years. These funds have been used to fund back and front of house design improvements, increasing both guest and staff accommodation capacity, and a conversion to solar power. Positive impacts have been rapid with annual revenues increasing by more than 25% generating a near threefold increase in operating profits for the conservancy and more than a 40% increase in salaries and wages paid to employees. Significantly, this transaction also catalysed the entry of the Development Bank of Namibia into the community conservancy sector for the first time. Following several ‘learning’ interactions with the bank, it has now made its first tourism investment into a community conservancy – and plans several more.