First sustainability bond launched
07 June 2021 | Business
Sustainability bonds, commonly referred to as “use of proceeds bonds”, are unique, fixed-income instruments and investment vehicles for commercial and institutional investors. The proceeds are exclusively applied to finance or re-finance a combination of both green and social projects, in part or in full, new or existing. The projects will be benchmarked and aligned with the four core components of the International Capital Market Association's (ICMA) Green Bond Principles (GBP), Social Bond Principles (SBP), and follows the ICMA Sustainability Bond Guidelines. The four components for compliance include the use of proceeds, a process for project evaluation and selection, management of proceeds and impact reporting.
For investors, sustainability bonds provide an opportunity to support socially and environmentally responsible projects, along with the additional benefits associated with investing in an award-winning, highly regulated and “risk-free” instrument with a strong emphasis on transparency and impact disclosure. Projects eligible for funding include those focussed on renewable energy, energy efficiency, green buildings, sustainable waste management and a focus on sustainable agriculture and tourism, and investments into quality, accessible and innovative healthcare and education facilities.
Bank Windhoek will evaluate social projects based on the primary objectives and the underlying impact of the project. The bank will report on the environmental and social effects of the projects financed in its annual sustainable bond impact report.
“The Covid-19 pandemic led to a steep increase in demand for innovative financial products like green and sustainable bonds that facilitate and promote a shift to a more sustainable economy. In Namibia, we experience global warming, and the effects of climate change on our local environment and businesses are evident,” said Bank Windhoek’s manager of sustainable investments and deal origination, Ruan Bestbier.
Bank Windhoek’s Managing Director, Baronice Hans, said: “Both the green and sustainability bond issuances are milestones, not only for Bank Windhoek and Capricorn Group but Namibia as a nation. We unequivocally set the tone of our commitment to sustainable finance. We believe that the green and sustainability bond issuances enable our clients' sustainability requirements.”
“Sustainable bonds are a new addition to the cache of financial instruments. Along with established green bonds, sustainability bonds promote positive change in society and the environment and provide investors with a means of aligning their asset allocations with sustainability objectives in a meaningful way,” said Bank Windhoek’s Chief Treasurer, Claire Hobbs.