By: Vitalio Angula
In what economists describe as a huge win for the country, the Development Bank of Namibia recently announced its accreditation by the Green Climate Fund as a Direct Access Entity under its medium-sized project category.
This makes DBN the first institution in the country to acquire this status and qualifies the bank for funding of between US$50 and US$250 million.
It also allows DBN to design, submit, and implement its own climate-change mitigation and adaptation projects under international standards. It marks a significant shift that now enables Namibia to tap into climate funding independently without intermediaries to speed up green-growth investments domestically.
WHAT THIS MEANS FOR THE COUNTRY
With Namibia’s Eurobond, issued in 2015, set to mature in October this year, the diversification of the country’s funding sources instills confidence in investors that Namibia is not just sitting back waiting for manna to fall from heaven but is building the institutions needed to attract capital.
Local Economist at Simonis Storm Securities (a wealth management agency), Almandro Jansen, says being accredited by the GCF is a big win for the country’s reputation and enhances Namibia’s profile on international markets.
Responding to questions regarding the announcement of Namibia’s accreditation made at the 42nd Board Meeting of the GCF held in Port Morseby, Papua New Guinea, from 30 June to 03 July, Jansen says that showing it (Namibia) can access concessional climate-linked financing helps soften the country’s risk profile.
“Getting GCF accreditation is not easy; it means DBN has met global standards and financial oversight, environmental sustainability, and social safeguards”, said Jansen.
Jansen says this reflects well on Namibia’s capacity to manage complex finance and also sends a strong message that Namibia is diversifying its funding sources at a time when external debt is expensive and global markets are volatile.
PIPELINE AND DISBURSEMENT TIMELINE
The DBN says it is collaborating with government and private partners to accelerate the origination and readiness of projects to be funded through GCF.
According to the institute’s Chief Marketing and Corporate Affairs Officer, Jerome Mutumba, initial concept notes and project frameworks are being finalized, and the bank anticipates that by early to mid-2026, it will have proposals ready for GCF approval.
“Once approved, first disbursements typically follow within six to twelve months after finalizing agreements, due diligence, and contracting, so projects submitted in Quarter 2 of 2026 could see initial funding flowing by late 2026 or early 2027”, Mutumba told this publication.
“The Integrated Strategic Plan 2024-2029 sets a framework for DBN to pursue green impact investment markets targeting sustainable climate-aligned opportunities”, Mutumba explained.
“The aim is to diversify funding sources, draw in global climate capital and reduce financial costs in Namibia…… while the accreditation enables global reach, the primary focus is domestic, to mobilize funds and develop climate-smart projects across Namibia that align with national development and Paris Agreement goals”, Mutumba further explained.
HOW DEVELOPMENT BANKS ARE EVOLVING
Almandro Jansen of Simonis Storm Securities says, “Gone are the days when development banks were mere financiers of roads, bridges, and industrial parks.
“In a world where climate change is re-shaping economies, a bank like DBN has to be part of the solution, the GCF accreditation shows that DBN is stepping up not just to fund development but to do so in a way that is climate-smart and forward-looking”, says Almandro Jansen.
Jansen says climate finance needs to be aligned with the country’s development plans and budget.
“If institutions work in silos, we will miss the opportunity to make GCF funding a part of a broader strategy to transform Namibia’s economy”, the Economist says.
IMPLICATIONS FOR NAMIBIA’S SOVEREIGN DEBT
The development banks spokesperson, Jerome Mutumba, says GCF accreditation strengthens Namibia’s financial profile and reduces reliance on costly sovereign borrowing.
“This accreditation supports deepening local project finance capacity, unlocking cheaper capital flows which can help Namibia optimize its sovereign debt portfolio and potentially improve Eurobond pricing”, Mutumba says.
Jansen says although GCF funds are not meant to pay debt, “there is a worthwhile connection worth understanding”.
“Our Eurobond issued in 2015 matures in October and government needs to raise over U$D 120 million to cover the outstanding amount. This puts pressure on local markets, reserves and on public confidence” says Jansen.
“If DBN can fund climate-resilient infrastructure in terms of water, energy and even flood prevention using concessional GCF finance, it means the government does not need to borrow as much to fund these very same projects…. So, while GCF funds don’t go directly to treasury, they (it) support (s) fiscal health by shifting infrastructure finance off the states balance sheet”, Jansen told this publication.
Jansen says for bondholders, the accreditation reduces investor uncertainty.
“It signals that we are not just reacting to short-term challenges but that we are planning for the long-haul”, Jansen says.
“Namibia’s accreditation by the GCF opens the door for future sustainability linked or green-bond issuance which is where a lot of global capital is now flowing and this gives investors a long-term stable development story to buy into”, Jansen further said.
CHALLENGES
Jansen however warns that markets will only react positively if they see “real projects, with real results, under-pinned by real governance”.
“This GCF accreditation is not just a feather in DBN’s cap it’s a national opportunity”, Jansen notes.
He cautions that the GCF accreditation should be seen as the start of a journey and not a destination.
“Climate finance isn’t just about projects and pipelines it’s about shifting how we think about development”, says Jansen.
“Namibia is taking steps to do development differently, in a way that’s sustainable, inclusive, and resilient but for this to work, we need strong coordination between DBN, the Ministry of Finance, the National Planning Commission, and local governments”.
“Everyone needs to be pulling in the same direction”, Jansen concluded.
