RMB arranges FNB Namibia’s inaugural green bond issuance

RMB Namibia, RMB SA Debt Capital Markets (DCM) and RMB Sustainable Finance successfully arranged FNB Namibia’s first green bond issuance in the local DCM. This marks the second issuance of green bonds in Namibia to date, with FNB Namibia raising N$353 million across three and five-year notes.

The proceeds of the green bonds will be allocated to eligible green loans applied towards Namibian green buildings and renewable energy generation projects. Sustainability is key to FNB Namibia’s vision of a globally competitive Namibia, and these green bonds mark a major milestone for the country and the bank. Through this, FNB Namibia can ensure appropriate financial resource allocation to support the greening of the Namibian economy, as well as drive stronger issuance volumes while enabling the growth of the local green bond market.

FNB Namibia’s inaugural green bond auction achieved a diverse order book, supported by over 13 local investors. The auction was well received, garnering over N$2 billion in bids, resulting in the auction being 5.82 times subscribed.

The green bonds, listed on the Namibia Stock Exchange, have been issued off FirstRand Limited’s sustainability bond framework, which has been established at a group level to support the issuance of thematic debt instruments by the group (including its subsidiaries, like FNB Namibia). The framework was independently assessed and is aligned to the guiding principles and reporting requirements of the United Nations Sustainable Development Goals, the International Capital Markets Association Green Bond Principles 2021, Social Bond Principles 2021 and Sustainability Bond Guidelines. RMB’s Namibia and South Africa DCM team, together with the RMB Sustainable Finance & ESG Advisory team, worked closely with local investors to ensure that they were comfortable with the principles and resultant issuance.

“This inaugural green bond issuance shows that we are at the forefront and committed to unlocking sustainable finance opportunities that benefit our clients, communities, and environment at large. Further, through the adoption of the group’s sustainability bond framework, our approach supports transparent, comparable disclosures in the context of environmental, social and corporate governance issues,” said Selma Kapeng, FirstRand Namibia Group Treasurer.

Globally, the market for green bonds has grown exponentially, over 100% year on year (as of Dec 2021). The African market contributes only 0.03% to this global market (as of Dec 2021). This demonstrates that Namibia, and the continent, provides untapped opportunities for sustainable funding instruments to support the growth of green economies.

“We believe the market opportunity for sustainability bond issuances is significant, and one that issuers should look to access with the advice of a trusted sustainability partner like RMB. There is significant expertise required to ensure a credible issuance, but a clear market appetite to support a well-structured transaction. RMB combines marketleading Sustainable Finance capabilities with the top DCM franchise to deliver these solutions for clients,” said Matthias Langheld from RMB Namibia.