COP26 has dominated the headlines in recent weeks. Much of the discussion centred on how to fund climate projects in the developing world. Huge numbers were mentioned: around USD 500 billion by 2025, according to COP26 President Alok Sharma .
However, as a Namibian unlisted fund manager, I see a different challenge receiving less coverage: we lack the suitable projects – not the funding.
Eos Capital have funding that needs deployment into infrastructure and agriculture projects in Namibia – both new and existing. We have made the conscious decision to include climate as a priority in these projects – be it resilience (the ability to withstand external pressures imposed by climate change), adaptation (adjusting to current or expected climate change and its effects) or regeneration (an interdisciplinary approach to end the climate crisis in one generation).
Despite having more than N$600m (USD 40m) funding available for projects, the projects themselves do not exist in Namibia. We do not have a robust pipeline of opportunities developed by project developers in Namibia compared to other places. The Namibian landscape is characterised by having a shortage of skilled and able project developers who have the resources to do project development work at risk.
According to Philippe Valahu, CEO of Private Infrastructure Development Group (PIDG), this is a problem throughout sub-Saharan Africa. And it does not only relate to climate projects – it is a general problem for all infrastructure and agriculture projects. It means that as funders, we must create projects ourselves and find developers to support us in bringing them to bankability, which is not sustainable.
So what does Namibia need to do to create more projects?
▪ First, we need to start talking about the issue. Current conversations focus on whether funding is available for projects rather than whether the projects themselves exist.
▪ Second, Namibians need to start changing mindsets. Skilled people need to consider entrepreneurship and project development, even if it means leaving safe salaried jobs to do so or changing their business models. These people need to make a conscious decision to make a difference by taking a risk in developing a project that could create jobs and growth, even if it takes a couple of years.
▪ Finally, we need education on how to develop and promote a project. People often come into our offices with a 5-page business plan and some rough research on the market they plan to enter and get angry when we do not want to fund them.
Project development requires proper market studies, technical partners and off-take agreements, to name but a few. With these in place, the project is investable (bankable).
The opportunities are endless in Namibia for climate, infrastructure and agriculture projects. We have the sunshine, we have the space, and we have the workforce. We have so much to offer the world – it is time we become project developers and build a pipeline to attract funding that exists in various places to develop our great nation and contribute to the world’s climate objectives.
*Nicole is co-founder and Managing Partner of Eos Capital
