On December 13, 2018, the Development Bank of Namibia (DBN) and German Development Bank KfW signed under the German Development Cooperation an agreement for a concessional loan of 240 million Namibia-Dollars (approximately 15 million Euro) to be used for development of climate-related infrastructure, such as renewable energy, water and low-carbon transport projects.
Financing mitigation and adaption to climate change
Climate-appropriate financing is currently a small but fast-growing niche market in Namibia and DBN will with the support of the German development Cooperation fill this much needed financing gap in the local market. DBN’s portfolio of climate-mitigating projects encompasses infrastructure projects for solar photovoltaic and wind generation as well as rural and urban water infrastructure and public transport projects.
The new credit-line will provide long-term finance to enable DBN to provide private and public investors incentivized conditions for climate-related infrastructure projects. Additionally a grant worth 500.000 Euro will support technical capacity building for DBN. The agreement will be backed by a sovereign guarantee.
Enhancing sustainable investment
At the signing ceremony, KfW Principal Project Manager Baronesse Claudia von Fersen emphasized that “the DBN with its main objective to contribute to economic growth and social development can now attract and inspire sustainable investments to realize these goals.”
DBN CEO Martin Inkumbi said that the Bank has a track record of providing finance for enterprises and projects that stretches back to the Bank’s inception in 2004. He added that the Bank is not just aware of the need for infrastructure that reduces emissions, but also for climate adaptation in light of the threats of heat and drought to Namibia.
Inkumbi expressed gratitude to KfW for the relationship which aims at providing solutions to the challenges of the future, and said that the funding would provide the Bank additional leeway to further develop and refine models and options, that would assist in growing the Bank’s portfolio of projects to address climate change and Adaptation.