Namibia will need N$9.9 billion annually to meet its green growth objectives.
This is according to Heather Sibungo, the deputy minister of the Ministry of Environment, Forestry and Tourism.
Speaking during the Bank of Namibia (BoN) thought leadership event on 'Leveraging Innovation for Green Finance' last week, Sibungo said climate financing is necessary for the country to reach those objectives.
Sibungo noted that the finance sector could help mobilise the required funds through green bonds, sustainability linked loans and blended finance.
"Innovative financial mechanisms, such as green bonds and sustainability linked loans to channel investments into projects that address both mitigation and adaptation needs, should be prioritised," said Sibungo.
She called for collaboration between ministries, the central bank and other financial institutions to create an enabling environment for climate investment.
According to Sibungo, the Environmental Investment Fund (EIF) has mobilised and managed financial resources of over N$3.6 billion for climate action.
Local institutions have also already made strides in sustainable finance. Standard Bank Namibia launched a green bond in 2022, mobilising N$400 million for solar and wind energy projects, while RMB Namibia's green bond, issued in partnership with FNB Namibia, raised N$353 million for green buildings and renewable energy initiatives.
In Namibia, several local banks have issued green bonds over the years, with some institutions set to launch this year.
Bank Windhoek issued the country's first green bond in 2018 and a sustainability bond in 2021, raising N$227 million to fund renewable energy, sustainable agriculture and biodiversity projects.
Standard Bank Namibia followed with a green bond in 2022, mobilising N$400 million for solar and wind energy projects.
In 2022, Rand Merchant Bank partnered with First National Bank Namibia to issue bonds to the value of N$353 million for green buildings and renewable energy initiatives.
Earlier this year, Alpha Namibia Industries Renewable Power Limited announced it would be launching green bonds after S&P Global Ratings assessed the green bond framework as dark green, the highest sustainability rating.
Speaking during the event, BoN governor Johannes !Gawaxab said climate change has far-reaching implications for the economic stability of nations.
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"It is affecting the monetary policy decisions of central banks, influencing financial stability of the banking and non-banking financial sector and threatening economic performance," he said.
According to !Gawaxab, one of the implications of climate change is drought, which has driven the price of food up.
"In Namibia, we have seen droughts drive up food prices, exacerbating inflationary pressures, affecting the poor and vulnerable members of society," he said.
He added that inflation that is induced by climate change would require a fine balancing act to manage, considering high unemployment and weak economic conditions.
"The climate crisis further affects food security and agricultural productivity, and causes severe damage to homes and critical infrastructure. These disruptions are reminders that sustainability is no longer a choice but a necessity," said !Gawaxab.
