The Finance Ministry says 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, The Brief can exclusively reveal.
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.
“The issuance of a sovereign green bond is subject to identified green projects which the Government will undertake either directly, through SOEs or through Public-Private Partnerships (PPP). Government is currently looking and considering various candidate projects. At this point, it is unlikely that any such projects will be ready for the Government to go to market during this year,” Finance ministry Spokesperson, Wilson Shikoto, told The Brief.
“As outlined prior, the candidate projects are still under consideration and details of the final projects will be announced once ready.”
This was after Finance Minister Ipumbu Shiimi had in September announced that the government was working on modalities for the planned issuance, with definite details expected in the next 6 months.
However, Shikoto said the government will consider how to proceed with its capital raising efforts once projects to be funded have been identified, including the amount and its modalities.
“Government will continue to explore options and make the necessary announcement to the public timeously. The issue amount will be determined at the time of going to market. The bond structure will be determined at the time of going to market.” Shikoto said, without giving a timeline.
The government’s initial plan was aimed at attracting funds from investors looking at investing in climate related initiatives such as renewable energy resources and green hydrogen.
The latest development comes after the government recently postponed the launch of its much-awaited Sovereign Wealth Fund, dubbed the Welwitschia Fund, from the end of last year to the first quarter of 2022.
Contributions towards the Sovereign Wealth Fund and royalties are expected to amount to N$627 million per annum, once full production capacity for the country’s Green Hydrogen projects is reached.
The European Commission in September 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.
Namibia, according to the International Renewable Energy Agency, has the potential to raise the total investment from its initial green hydrogen projects to US$9.4 billion, which is almost in line with the country’s current GDP.
