N$2m loans available for green projects
A green concessional loan facility targeting young entrepreneurs will be launched by the Environmental Investment Fund (EIF) to provide up to N$2 million per viable investment.
This facility is expected to grow by N$300 million over the Medium-term Expenditure Framework.
During the state of the nation address last week, President Hage Geingob announced the implementation of a green credit facility that will prioritise funding towards climate and environmentally friendly investments, with emphasis on youth entrepreneurship.
The green credit facility is designed by the EIF and will be implemented through the establishment of a credit line to a financial intermediary, preferably an entity with proven experience and specialisation in the area of SME financing.
Investment areas under consideration in the facility are renewable energy and energy efficiency, natural resource value chains, waste management or recycling, sustainable agriculture, bush encroachment, sustainable tourism, green technologies innovations, and resource efficiency, such as water.
In an interview with New Era yesterday, EIF CEO Benedict Libanda explained the intermediary entity will then, in turn, use these credit lines to finance projects that have high environmental benefits.
“The fund will support the financial intermediary and project promoters to ensure that the project pipeline and the actual portfolio attain the objectives of the facility. The facility will advance loans up to N$2 million to deserving and viable projects. These loans will be structured at highly concessional terms,” he noted.
The procurement of the financial intermediary to deliver the product to clients will begin by the third week of April 2022.
It is expected the facility will be launched by June 2022, and the call for submission of business plans will thereafter follow.
Libanda said the fund will provide seed capital of N$36 million and re-capitalise the facility on an annual basis.
Furthermore, EIF is currently engaging several development partners to contribute towards the facility.
The facility is expected to grow up to N$300 million by the 2024/25 financial year.
In addition, guarantees will be considered under the credit line on a case-by-case basis.
The guarantees offered will be limited to sectors that the fund has identified as a priority area of investment.
The financial intermediary may provide performance guarantees, advance payments and credit security bonds (from other lenders) under the credit line.
Geingob reiterated green hydrogen is part of the country’s long-term decarbonisation agenda.
“Our economic development aspirations also factor in the reality that Namibia is one of the world’s most vulnerable countries to climate change. We have all witnessed the devastating impact climate change has on our country. For example, since 2020, we have experienced severe and widespread wildfires, which resulted in about 3 million hectares of land being burned across the country,” he said.
According to him, Namibia expects events such as droughts, wildfires and increased rainfall variability to become even more frequent and severe in the years to come.
Therefore, he assured climate change adaption and mitigation measures are prioritised to ensure a stable supply of water, energy and food security.
Consequently, Geingob emphasised the development of green energy will be an enduring theme for Namibia’s economic recovery. “Our efforts to promote the development of a green hydrogen and ammonia industry are starting to bear tangible results. In this regard, Namibia is expected to attract investments of US$9