Bank Windhoek this week published its first Green Impact Report. The Report details projects that received funding from its NSX listed Green Bond proceeds and highlights the core environmental impact indicators on a project level basis. The impact indicators are derived from the bank's Green Bond Framework and the International Capital Market Association's Green Bond Principles.
In keeping with our pursuit to be a leading financial services institution that delivers sustainable value and drives progress, Bank Windhoek issued a Green Bond to international acclaim when it listed on the Namibia Stock Exchange during December 2018. This achievement positions Bank Windhoek as the first commercial Bank to issue a Green Bond not only domestically but across the Southern African region.
Green Bonds are one of the most prominent capital raising innovations in the area of sustainable finance over the past decade. The success of Bank Windhoek's Green Bond was recognised internationally when it received the “Green Bond Pioneer Award" from Climate Bonds Initiative in 2019.
The majority of applications for green financing was for solar energy projects to generate electricity to add to the national grid and to assist companies to become self-reliant in their energy needs.
Bank Windhoek's Sustainability and Deal Origination manager, Ruan Bestbier said that the overall expected electricity generated and the Annual Green House Gas emissions from the project in tonnes of Carbon Dioxide Equivalent [tCO], the solar photovoltaic (PV) projects financed by the Bank Windhoek Green Bond could generate over its expected lifetime, is 305 710 metric tonnes. The amount of carbon dioxide (CO2) emissions reduced in one year is theoretically equivalent to:
“In Namibia, we continuously see the impact of global warming and the effects of climate change on our local environment and businesses. Bank Windhoek also aligns its business practices and sustainability performance to the relevant Sustainable Development Goals (SDGs) as set out by the United Nations and more specifically, aims to address Goal 6, which addresses Clean Water and Sanitation, Goal 7, focussed on Affordable and Clean Energy, Goal 11, aimed at attaining Sustainable cities and Communities and Goal 13, dealing with Climate Action. The projects financed with the Green Bond funding facility focused on solar electricity generation which directly addresses goals 7 and 13," said Bestbier.
He added, “We are proud of the seven solar photovoltaic projects that were successfully financed with the N$66 million raised within 12 months after the initial Green Bond issuance and this initiative was an excellent learning experience for the Bank's staff and clients involved."
“Our Investors were unanimously agreed that the Green Bond should be seen as an important tool for creating awareness amongst the public on the links between sustainable development and favourable finance," Bestbier said.
“It is clear that there is no shortage of bankable green projects in the Namibian market, despite the impact of COVID-19 global pandemic which placed some stress on existing and new developments," said Bestbier.
Namibian Stock Exchange Chief Executive Officer, Tiaan Bazuin stated that “Bank Windhoek's Green Bond is listed on the Namibia Stock Exchange (NSX) and complies with the Sustainable Stock Exchanges (SSE) Initiative, a United Nations (UN) Partnership Programme of the UN Conference on Trade and Development (UNCTAD), and the UN Global Compact, which aims to build the capacity of stock exchanges and securities market regulators to promote responsible investment and advance the sustainable practices of companies.
“The NSX is proud to have listed Bank Windhoek's Green Bond, making it a first for the NSX and a truly Namibian product," Bazuin said.
Claire Hobbs, Chief Treasurer, stated that, “the Bank Windhoek Green Bond is the result of individuals within the Bank who are passionate about the work they do, protecting the environment and contributing toward the wellbeing of the country in which we do business and in this aspect our Treasury team have gone beyond the call of duty and set an example of what is possible" Hobbs added that the Green Bond aims to enable and develop the key role debt markets can play in funding projects that contribute to environmental sustainability. “Moreover, given the global need for an urgent transition to a low-carbon, climate-resilient economy and sustainable economic development, financial markets play an integral role in driving investments in climate-friendly projects."
“We strive to continue the momentum gained by the Green Bond," said Bestbier “and want to diversify our Green loan portfolio more towards sustainable agriculture and tourism as well as energy efficiency investments in order to improve the pipeline of bankable green projects and in turn, grow the market for sustainable finance mechanisms." He added:" Bank Windhoek identified the opportunities that Green Bond issuance in the local market could create, not only as a sustainable investment vehicle for institutional investors, but as a favourable financing mechanism for clients and depending on the market conditions and pipeline of projects, we would like to consider the issuance of a second Green Bond in the near future."
Bestbier added, “the current global COVID-19 pandemic and rising energy prices will likely continue to challenge the growth of Namibian businesses in the near future. These trends coupled with the negative impact of bush encroachment, which is estimated to cover half of the country, resulting in a decrease of agricultural yield, reduction of biodiversity, reduction in water resources, the impact of drought and a strain on energy resources, make green economy growth a priority in Namibia. It demonstrates the need to assess and build resilience to a changing climate. In Namibia, we continuously see the impact of global warming and the effects of climate change on our local environment and businesses. With Bank Windhoek's Green Bond initiative coupled with our participation in the Sustainable Use of Natural Resources and Energy Finance Programme (SUNREF), a green finance and technical assistance facility, we were able to turn bankable projects into sustainable reality."
Bank Windhoek's Managing Director Baronice Hans said, “the Green Bond was a milestone for Bank Windhoek and Capricorn Group, which unequivocally set the tone of our commitment to sustainable finance and to the growth of renewable energy generation both locally and regionally. We believe that the Green Bond enabled us to meet our clients' sustainability requirements by creating a complete value chain from raising green funding to offering favourable green loans with favourable terms aimed at contributing to a low-carbon and client resilient future. I want to thank all our partners in making Southern Africa's first Green Bond such a success."