Standard Bank Namibia has successfully raised N$400 million of funding in the debt capital markets, through a green bond issuance, with Standard Bank of South Africa acting as joint arranger.
The debut Green Senior Unsecured bond auction held on 30 June 2022, raised N$400 million across two notes, namely N$200 million of 3-year notes, and N$200 million of 5-year notes.
“The auction was well received achieving a 2.41x oversubscription on issuance size, with the bulk of the bids within guidance and the spreads clearing at the lower end of price guidance. The proceeds of the Green Bond issuance will be used to finance, and refinance, in whole or in part, eligible renewable energy projects in Namibia in accordance with the Standard Bank Group Sustainable Bond Framework. The use of proceeds aligns with SBN’s SEE Impact Areas – Infrastructure, Climate Change and Sustainable Finance, and maps to the United Nations Sustainable Development Goals – Affordable and Clean Energy (SDG7), Sustainable Cities and Communities (SDG11) and Climate Action (SDG13),” Standard Bank Namibia Head of Treasury & Capital Management, Danie Rourke told The Brief.
He said the bank had already disbursed funding for the first beneficiary of the capital raise, which is focused on renewable energy.
“Our ALCO has approved the asset selection pursuant to eligibility screening. Projects primarily focusses on solar PV and wind farms, with or without battery storage, but excludes projects that have a fossil fuel element of any kind. The first qualifying project deal was disbursed on 30 June 2022,” Rourke said.
On why the listed banking group had decided on issuing a green bond, Rourke said, “sustainability finance is key to Standard Bank Namibia’s purpose of driving Namibia’s growth and is a strategic value driver for maximising positive Social, Economic and Environmental (SEE) impacts of our business activities. This debut green bond issuance speaks to our commitments to address climate change and supports renewable energy projects in the Namibian Economy.”
This comes as the bank also issued the country’s first green loan, after it entered into a multi-million-dollar funding agreement with an undisclosed company. Global green financing, aimed at environmentally friendly projects around the world, has grown over 100 times in the past decade, according to a new study from the TheCityUK and BNP Paribas. Global borrowing by issuing green bonds and loans, and equity funding through initial public offerings targeting green projects, swelled to US$540.6 billion in 2021 from US$5.2 billion in 2012, according to the research.
The jump in issuance underscores the growing push from governments and corporations to try to rein in carbon emissions and achieve climate goals. The share of green finance in the total finance market was about 4% in 2021, compared with around 0.1% in 2012.
The number of publicly traded companies involved in green activities grew from 401 companies in 2012 to 669 in 2021, the data showed. Developing countries according to the World Bank currently account for just US$1.6 billion of the estimated US$33 billion in outstanding green loans.
The bank is targeting more issuances, as it intends to play a key role in sustainable funding solutions in Namibia.
“We are planning further sustainability issuances in future as part of a planned issuance programme. We are increasingly experiencing and living with the impacts of climate change – extreme weather, droughts, flooding and heat waves. The green angle enables a growing number of people and institutions, both locally and internationally, to help influence change and act to support climate change initiatives through investing. In addition, and specific to Namibia, by investing in this bond, investors participate in the renewable energy initiatives which are key pillars to grow Namibia’s economy and our sustainable development goals by 2030,” Rourke said.
