UN Namibia and Bank Windhoek contribute to enhanced Capacity Building on Thematic/ Sustainability Bonds at UN Training
Multiple, prolonged and sequential crises are impacting the attainment of the SDGS globally. This is especially so, in LICs and MICs which were already being constrained by access to affordable development finance. With COVID-19, financial resources had to be diverted towards the emergency health pandemic and its related impact. The current Russian invasion of Ukraine is further exacerbating the financial position of countries as previously strained financial positions are being geared towards basic needs, including for food security.
Speaking at the Training, Ms. Eunice Ajambo, Economist at UN Namibia stated that "Namibia as an Upper Middle Income Country (UMIC) is no exception. The recently tabled budget (FY2022/2023) speaks to a continuously shrinking fiscal space, high debt stock and debt-to-GDP levels, hovering at an estimated 70%. Growth forecasts, while positive in 2022 relying on the predicted growth in the mining sector (commodity price wave), collected revenues will go towards the financing of debt, further constraining the available resource basket to address the persistent triple challenges of poverty, inequality, and unemployment."
However, she added "Namibia’s endowment with natural resources including sunshine, wind and water is a continued source of innovation as articulated in the Harambee Prosperity Plan II (HPPII), also towards financing development for a low-carbon, inclusive and climate resilient future."
Moreover, "The UN's four-year strategy for financing the 2030 Agenda for Sustainable Development identified the need to address all barriers that may impede the flow of finance to sustainable development, as per provisions in the Addis Ababa Action Agenda (AAAA) on financing development, and also in Namibia’s UN SDG Fund Joint Programme."
During the recent Training on Sustainable Financing Instruments for an Inclusive Recovery, staff of UN System across the globe learned about the experience of Namibia issuing Green and Sustainability Bonds.
Namibia is a pioneer: Bank Windhoek, Namibia's leading financial services provider, was the first commercial bank to issue and list a Green Bond in Southern Africa in 2018, and later the Sustainability Bond in 2021, and was awarded the Green Bond Pioneer Award.
In his presentation, Mr. Ruan Bestbier, Manager, Sustainability & Deal Origination at Bank Windhoek, spoke to Namibia’s journey with thematic bonds commencing in 2017 through the SUNREF Namibia Programme, to date.
Namibia’s experience speaks to the importance of enablers for preparation, including the existence of a Sustainable Bond Framework, and adherence to global principles, including of the International Capital Market Association (ICMA). It also speaks to multi-stakeholder partnerships in the development of the Sustainability Bonds, including with International Financial Institutions (International Finance Corporation-IFC) and development partners (Agence française de développement - AFD), in this case.
Namibia’s experience also highlights the need for technical assistance including:
- Technical assistance facilities – Technical and financial feasibility screening
- Start-up project - de-risking, especially in Sustainable Agriculture, Social upliftment
- Project guarantees, grant funding, blended finance mechanisms
- Gender Responsive Climate Finance feasibility studies
- Marketing initiatives- Create awareness about benefits going “Green”
- Sustainability project impact reporting – Support, Guidance, Framework, Standardized metrics
The training was organized by UN Women and UNESCAP, collaborating with the UNDCO and UN Namibia.
Expert contributors during Bank Windhoek’s presentation included from the Luxembourg Stock Exchange, the World Bank; the International Capital Market Association (ICMA), the UNDP Sustainable Finance Hub, the United Nations Capital Development Fund (UNCDF).
The outcome of this training, peer exchange and South-South cooperation, will be the establishment of a UN Inter-Agency Working Group on Thematic/ Sustainability Bonds, advancing the work on development finance, among UN member states.