More millions flow to climate-related infrastructure

The Development Bank of Namibia (DBN) and KfW Development Bank recently signed the second concessional loan of around N$600 million (translating to €30 million) to be used for the development of climate-related infrastructure, such as renewable energy, water and low-carbon transport projects.

Climate-appropriate financing is fast growing – not only globally, but also in Namibia.

The DBN addresses this much-needed financing in the local market with the support of German development cooperation.

The DBN’s portfolio of climate-mitigation projects encompasses infrastructure projects for solar photovoltaic (PV) 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 the DBN to provide private and public investors with incentivised conditions for climate-related infrastructure projects.

It follows the first credit line amounting to approximately N$240 million signed in December 2018, which was successfully placed in the market, primarily assisting private companies to set up solar PV infrastructure.

At the recent signing ceremony, KfW country director Beatrice Lucke said: “The DBN’s main objective to contribute to economic growth and social development in Namibia will increasingly be achieved by attracting investment in green and transformative infrastructure, which is the basis for any sustainable development around the world.”

DBN chief executive Martin Inkumbi said the bank has built up a significant project pipeline for eligible projects, particularly in the renewable energy space over the past years, and is looking forward to ultimately moving ahead with the financing.

He said access to affordable financing is a key element for the realisation of climate-related infrastructure projects and that the bank is not only 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 his appreciation to KfW and the German government for the relationship that aims to provide solutions to climate challenges, and said the funding would provide the bank with additional leeway to further develop and refine models and options.

“This would assist in growing the bank’s portfolio of projects to address climate change and adaptation and position the DBN as the national and regional climate bank,” he said.