Namibia has begun engaging lenders such as the European Investment Bank and Climate Fund Managers amid plans to issue a Green Bond to raise funds to finance projects that use renewable energy to manufacture hydrogen for export.
This comes as the government aims to attract funds from investors looking at investing in climate related initiatives such as renewable energy resources and green hydrogen.
“Developers will be responsible for generating the majority of financing and equity, while the government will have a call option for up to 24 percent and could raise US$500 million for its own shares. Green bonds could be issued, and conversations have begun with lenders such as the European Investment Bank and Climate Fund Managers to secure funds for the country’s investment,” Presidential Economic Advisor and government’s Green Hydrogen Commissioner, James Mnyupe said during the recently held World Economic Forum.
“We believe that if we do a good job planning these projects, we will be able to raise a respectable amount of debt for them.”
The pronouncement by Mnyupe,however, comes as the Finance Ministry in January told The Brief that Namibia will not be issuing a Green Bond this year as previously announced, as the government is still identifying projects that will benefit from funds raised.
This publication is reliably informed that the government plans to rope in State Owned Enterprises (SOEs) in some of the potential projects through a Public Private Partnership arrangement, although the exact details are still to be revealed.
Finance Minister Ipumbu Shiimi had in September last year announced that the government was working on modalities for the Green Bond issuance, with definite details expected in the next 6 months.
Plans by Namibia come as the European Commission in September last year issued its first NextGenerationEU green bond, raising US$13.8 billion to be allocated exclusively to green and sustainable investments across the European Union (EU).
The final order book was over 135 billion euros, which meant that the bond had been more than 11 times oversubscribed. This was the largest green bond order book ever in global capital markets, the largest green bond ever issued.
The funds from the NextGenerationEU green bond issuance will be used to finance green and sustainable expenditure under the Recovery and Resilience Facility.
