Bank Windhoek releases Green Bond Impact Report

22 July 2020 | Banking

Bank Windhoek this week published its first Green Impact Report. The report details projects that received funding from its NSX listed Green Bond proceeds and highlights the core environmental impact indicators on a project level basis.
The impact indicators are derived from the bank’s Green Bond Framework and the International Capital Market Association’s Green Bond Principles.
Bank Windhoek issued a Green Bond to international acclaim when it listed on the Namibia Stock Exchange during December 2018. This positions Bank Windhoek as the first commercial bank to issue a Green Bond domestically and across the Southern African region.
The success of Green Bond was recognised internationally when it received the “Green Bond Pioneer Award” from Climate Bonds Initiative in 2019.
Green bonds generally are fixed income instruments where the proceeds are exclusively applied to finance or re-finance, in part or full, new and /or existing eligible Green Projects and which are aligned with the four core components of the International Capital Market Association’s (ICMA) Green Bond Principles (GBP).
In its simplest form, the bank raises a fixed amount of capital, repaying the capital (principal), and accrued interest (coupon) over a set period. It is a win-win situation for both the bond issuer and the investor, as they can contribute towards sustainable future and showcase themselves as a responsible organisation.
The majority of applications for green financing was for solar energy projects to add to the national grid and to assist companies to become self-reliant.
Bank Windhoek’s sustainability and deal origination manager, Ruan Bestbier, said that the overall expected electricity generated and the Annual Green House Gas emissions from the project in tonnes of Carbon Dioxide Equivalent [tCO2_e], the solar photovoltaic (PV) projects financed by the Bank Windhoek Green Bond could generate over its expected lifetime, is 305 710 metric tonnes.
The amount of carbon dioxide (CO2) emissions reduced in one year is theoretically equivalent to 1 272 homes’ energy use for one year, 2 382 passenger vehicles driven for one year and the charging of 1 406 224 182 smartphones.
“In Namibia, we continuously see the impact of global warming and the effects of climate change. Bank Windhoek also aligns its practices and sustainability performance to the relevant Sustainable Development Goals (SDGs) set out by the United Nations. These projects directly address goals seven and 13,” said Bestbier.
“We are proud of the seven solar photovoltaic projects that were successfully financed with the N$66 million raised within 12 months after the initial Green Bond issuance and this was an excellent learning experience for the staff and clients involved,” he added.
“Our Investors were unanimously that the Green Bond should be seen as an important tool for creating awareness on the links between sustainable development and favourable finance,” Bestbier said.
“Bank Windhoek’s Green Bond is listed on the Namibia Stock Exchange (NSX) and complies with the Sustainable Stock Exchanges (SSE) Initiative, a United Nations (UN) Partnership Programme of the UN Conference on Trade and Development (UNCTAD), and the UN Global Compact, which aims to build the capacity of stock exchanges and securities market regulators to promote responsible investment and advance sustainable practices,” said the CEO of the NSX, Tiaan Bazuin.
“The NSX is proud to be part of this, making it a first for the NSX and a truly Namibian product,” Bazuin said.
“The Bank Windhoek Green Bond is the result of passionate individuals within the bank, protecting the environment and contributing toward the wellbeing of the country and in this aspect our treasury team have set an example of what is possible,” said Claire Hobbs, chief treasurer at Bank Windhoek.
“We strive to continue the momentum gained by the Green Bond and want to diversify our Green loan portfolio more towards sustainable agriculture and tourism as well as energy efficiency investments in order to improve the pipeline of bankable green projects, growing the market for sustainable finance mechanisms,” said Bestbier.
“Bank Windhoek identified the opportunities that Green Bond issuance could create locally, as a sustainable investment vehicle for institutional investors and as a financing mechanism. We would like to consider the issuance of a second Green Bond,” he added.
Bestbier further said that the current global COVID-19 pandemic and rising energy prices will likely continue to challenge the growth of Namibian businesses in the future.
Bestbier believes that this demonstrates the need to assess and adapt to a changing climate. “With Bank Windhoek’s Green Bond initiative coupled with our participation in the Sustainable Use of Natural Resources and Energy Finance Programme (SUNREF), a green finance and technical assistance facility, we were able to turn bankable projects into sustainable reality.”
Bank Windhoek’s managing director Baronice Hans said this was a milestone for Bank Windhoek and the Capricorn Group, which set the tone of their commitment to sustainability and the growth of local and regional renewable energy generation.
“We believe that the Green Bond enabled us to meet our clients’ sustainability requirements. I want to thank all our partners in making Southern Africa’s first Green Bond such a success,” Hans concluded.