Standard Bank Namibia has called for the establishment of a national credit guarantee scheme to unlock financing for crucial energy and broader infrastructure projects.
Speaking at the 7th Namibia International Energy Conference in Windhoek, Standard Bank Namibia’s Head of Corporate and Investment Banking, Nelson Lucas, said that while development expenditure in the national budget amounts to N$20.8 billion for the current fiscal year, it remains insufficient compared to the country’s infrastructure needs and GDP scale.
“Capital for infrastructure is quite scarce, and we clearly need significantly more… Secondly, we also need to consider credit-enhancing mechanisms. Domestically, we don’t yet have a proper program in place to support projects through partial risk guarantees or partial credit guarantees,” he said during a panel discussion.
Lucas noted that while there have been multilateral initiatives such as the Green Climate Fund and the African Development Bank providing partial guarantees, he believes there is a need to establish a local or national credit guarantee scheme.
“This could involve institutions like the Development Bank of Namibia (DBN) and other multilateral sponsors, who could assist in setting up programs that help bring in lender-type financing. This would be crucial in supporting project financing efforts for the country,” he noted.
This comes after Namibia’s renewable energy sector is struggling to secure local investment, with financial institutions and investors showing increasing reluctance to fund green energy projects, former Minister of Mines and Energy Tom Alweendo revealed.
Alweendo highlighted the risk-averse nature of local capital markets, which he said is impeding the growth of the sector despite the country’s vast renewable energy potential.
Namibia boasts abundant renewable energy resources, particularly in wind and solar power. However, many local companies that have obtained production licences continue to struggle with securing the necessary funding.
The former minister warned that if local investors fail to seize the opportunities in renewable energy, foreign capital will inevitably step in, leading to concerns over Namibian ownership and participation in the sector.
