Namibian bank first to issue green bond in Southern Africa

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Annines Angula

 

Windhoek – Namibia’s Bank Windhoek has announced its issuance of the first green bond in the Southern African market as it seeks to fund clean development projects and assets.

The bank, which is a wholly owned Namibian commercial bank and the country’s second largest lender, became the first commercial lender in southern Africa to launch such a bond on 5 December 2018.

This comes a year after a Philippine commercial bank, BDO Unibank Inc, successfully launched the first green bond in December 2017. The Philippines initiative attracted a US$150 million investment from the International Finance Corporation (IFC) to help expand financing for private sector investments to address climate change.

The Green Bond is listed on the Namibia Stock Exchange and complies with the Sustainable Stock Exchanges (SSE) initiative, a UN Partnership Programme of the UN Conference on trade and development, and the UN Global Compact.

The aim of the SSE is to ensure that market regulators promote responsible investment in sustainable development and advance the performance of corporate companies on issues of environmental and social impact as well as governance.

The Bank Windhoek bond has raised R66.60 million (US$4.74 million) on a private placement basis.

“As the only 100% locally owned commercial bank in Namibia, Bank Windhoek shares the responsibility to protect our country for future generations by actively contributing to and facilitating the transition to low-carbon and climate resilient economy,” said Baronice Hans, Managing Director of Bank Windhoek.

Over the last two years, green bonds have become increasingly popular, with sustainability emerging as the key metrics in deciding both financing commitments as well as the fate of several development projects. According to reports, total green bonds issued in 2017 were US$155 billion, and in the first half alone it stood at US$75 billion. Green bond issuance in CY 2018 is forecast to touch between US$250 billion and US$300 billion.

Green bonds are a small section of the debt market aimed at funding projects that are climate-friendly such as renewable energy, energy efficiency and resource efficiency, green buildings, sustainable waste management, sustainable land use, clean transportation, sustainable water management and climate change, critical issues that are being neglected in Africa.

Bank Windhoek is a unit of the Capricorn Group, an investment holding company with interests in banking, insurance and asset management in Namibia other Southern African Development Community countries.

“The issuance of Namibia’s first green bond, is testament to Bank Windhoek’s vision to be the financial partner of choice, ultimately leading to positive change in the country and the southern African region. We want to thank our first investors Old Mutual and the Government Institutions Pension Fund for their trust and commitment to the Green Bond,” said Claire Hobbs, Chief Treasurer of Bank Windhoek.

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