Bank Windhoek has raised N$250.5 million through Namibia's first-ever sustainability-linked bond (SLB).

The bank received bids totalling N$525.5 million, showing that the bonds were oversubscribed by 1.75 times.

The three-year bond is tied to specific sustainability performance targets, a departure from the more commonly used proceeds model seen in green and sustainability bonds.

The bank priced the bond at the three-month Johannesburg Interbank Agreed Rate plus 80 basis points.

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Unlike a normal green bond, where the bank promises to use the funds exclusively for green projects, this bond allows the bank to use the money for any general business purpose.

According to Bank Windhoek chief treasurer Claire Hobbs, this marks a shift in how the bank integrates sustainability into its funding operations.

"This is a significant evolution in our approach. Unlike our green and sustainability bonds, the SLB commits the bank to measurable performance targets. It's not just about where the money goes, but about what outcomes we deliver," says Hobbs.

The bank has pledged to deploy N$300 million in sustainable finance over the next two years as part of its commitment under the bond's framework.

Hobbs says this funding would primarily support small-scale projects with measurable social or environmental benefits.

"The focus is to empower projects that contribute to resilience and inclusive development. We believe in the impact of many small contributions adding up to real change," she says.

Bank Windhoek was the first issuer of both green and sustainability bonds last year.

Hobbs says the SLB builds on that experience and reflects a growing appetite among investors for instruments tied to sustainability outcomes.

"The strong demand for the bond shows investor confidence - not just in the bank, but in this type of thematic issuance. It's encouraging to see that the market is ready for this kind of innovation," says Hobbs.