By Claire Hobbs
One of the key roles of a commercial bank is to manage liquidity and ensure access to funding to support financial stability and economic growth.
Aligning funding costs with credit pricing, banks must respond to emerging trends, notably the global shift toward sustainable finance.
As sustainability becomes integral to financial strategy, banks must ensure they become strategic enablers of sustainable development. They must recognise that public sector funding is insufficient to realise national developmental objectives.
This involves mobilising financing not only from traditional sources but also through thematic instruments such as green, social, or sustainability bonds, which demand greater transparency and accountability.
At Bank Windhoek, we recognise that Namibia’s future financial resilience depends on embedding sustainability into core financial processes. As a net carbon sink, Namibia is particularly vulnerable to environmental shocks.
Directing funding toward initiatives with both ecological and social benefits is essential to building economic resilience and contributing to achieving national development goals.
However, Namibia’s sustainable finance landscape remains underdeveloped. Although the issuance of thematic financial instruments is gaining traction, it remains limited, often due to higher costs than conventional funding tools.
Furthermore, transformational projects usually require blended finance structures to enhance viability, yet access to concessional funding remains a challenge, particularly for the private sector.
Despite these constraints, thematic instruments offer an opportunity for innovation and leadership. Beyond these instruments, other funding approaches, such as co-financing, guarantees, risk-sharing facilities, and insurance, can be explored.
By adopting a more agile, adaptive, and forward-thinking Treasury function, financial institutions can help drive the transition to a more sustainable, resilient Namibian economy.
Treasury as a Catalyst for Sustainable Finance
The Treasury function within Bank Windhoek plays a pivotal role in mobilising funding and is uniquely positioned to shape the Bank’s sustainability agenda. By identifying opportunities for thematic financing and aligning investment priorities, Treasury can drive internal policy direction and enhance the institution’s market positioning within the sustainable finance niche, which has evolved from an opportunity created by climate risk and other interconnected risks.
Treasury’s role is to identify a funding opportunity from a mobilisation perspective, and close collaboration with business units ensures that mobilised funding is effectively deployed toward financially feasible projects that deliver environmental and social benefits.
Bank Windhoek is at the forefront of this shift, championing innovation in sustainable finance. As the first financial institution in Namibia to issue green and sustainability bonds, the Bank has successfully mobilised private funding to support impactful projects and catalyse the market to issue similar instruments.
For Bank Windhoek, these instruments were launched through strong collaboration between Treasury and business units, culminating in creating the Sustainability Loan – now a core offering designed to finance projects that align with sustainability objectives.
Globally, sustainable debt issuance continues to grow. According to Westpac IQ, it rose 9.7% year-on-year to USD 1.49 trillion in 2024, with green bonds accounting for 75% of total issuance across sovereign, financial, and corporate sectors.
However, Africa’s participation remains limited, with the Africa Policy Research Institute reporting that the continent contributes less than 1% to the global green bond market.
To bridge this gap and realise its sustainable finance potential, Africa must harness the collective capacity of corporations, municipalities, financial institutions, and sovereign entities.
Addressing the cost barriers of thematic issuances will require robust regulatory frameworks, targeted incentives, and sustained public-private collaboration. These efforts are essential to unlocking funding for contextually relevant projects that may not attract conventional financing but are vital for sustainable development.
Strategic Partnerships and Policy Shifts
Building on existing foundations and learning from early issuers is essential in a regional and local context where sustainable finance is still emerging. Collaboration is now more critical than ever to unlock shared value and identify opportunities for support across sectors.
Accessing concessional funding – vital for implementing impactful yet financially unfeasible projects – requires multi-stakeholder partnerships. This includes increased engagement with the government, leveraging multilateral alliances, and collaboration with international agencies to co-finance green infrastructure and scale impact.
Namibia must explore international best practices and adapt them to reflect local realities to ensure funding priorities align with national development goals. This alignment will foster coherence between private sector ambition and public sector planning, creating a more effective pathway to sustainable development.
In Namibia, where climate change and economic inequality are pressing concerns, the Treasury function must go beyond financial stewardship. It must act as a visionary leader, aligning liquidity management with strategic funding allocation and fostering collaboration with business units responsible for deploying funding to financially feasible projects.
At Bank Windhoek, we are committed to this transformative journey. We embrace our role as bankers and key stakeholders in shaping a more sustainable and inclusive Namibian economy, making one possibility a reality at a time.
*Claire Hobbs is Bank Windhoek’s Chief Treasurer
