CASE STUDY 16
First-mover inspiration: next generation financing for Namibia’s community conservancy movement
Context: Namibia has been at the forefront of community-based conservation in Africa, but it is a movement that has been financed almost exclusively by donor funding. With its 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, on behalf of the 2,000 member, 850,000 acre Khoadi-Haas community conservancy - the first in Namibia to independently exploit new legislation in the 1990s that permitted local communities to establish rights over wildlife and tourism. It is now also the first to have used commercial finance to develop its underlying economics - this transaction was the first of its kind to be approved by the Bank of Namibia.
The Investment: AWC invested US$ 245,000 to fund back and front of house design improvements, increase capacity and conversion to solar power. Impact has been both rapid and significant: run rate revenue has increased from US$ 515K to just under US$ 1 million (+ 85%) and annual dividend distributions to the local community are now running at US$ US$ 100K compared to less than US$ 30K at the time AWC made its investment. The employee base has increased from 30 to 55, driving a further US$ 120,000 per annum into the local community, from which 95% of employees are drawn. Perhaps most importantly, this investment stimulated the Namibian Development Bank to start engaging with the community conservancy sector, making its first business development loan to a local community in late 2014.