N$72 million for green loan facilityThe Environmental Investment Fund (EIF) is rolling out a green concessional loan facility targeting young entrepreneurs wishing to undertake economically viable investments that integrate low-carbon and climate adaptation instruments.
In this regard, the facility aims to deploy N$72 million of such investments over the next 12 months, and it is expected to grow to N$300 million by the 2024–2025 financial year. According to the EIF, the green concessional lending product aims to provide sustainable capital for SMEs wanting to access green financial mechanisms. "The fund notes that there is an increasing number of SMEs seeking to capitalise on green and sustainable strategies, incorporating them into their business strategy and aligning their funding mechanisms to sustainable development commitments."
It says supporting SMEs to improve their environmental footprint can promote the transfer, application and diffusion of cleaner production technology and methods to reduce hazardous waste, greenhouse gas emissions and water pollutants, while also helping them become more competitive.
Through this support, SMEs can also invest funds in such a way that the EIF makes a tangible and visible impact on the Namibian economy through the provision of concessional loans, guarantees and equity to Namibian individuals and enterprises, targeted mainly to communities predominantly in the rural and off-grid areas. "This thereby stimulates economic activity through sustainable development-oriented concessional financing and generates acceptable long-term returns compatible with other Southern African investment opportunities in the green space."
It also supports the creation of social and economic upliftment in Namibia through the deployment and use of innovative green technologies and sustainable agricultural practices to mitigate the effects of climate change.
Impact on lives
The EIF says that in order to achieve its investment objective, the facility’s strategy is to target investments that have the potential to make a long-term development impact on the lives and livelihoods of rural communities. "This will thereby unlock significant economic activity and value; provide credit financing to individuals, SMEs, and farmers alike to be extended over loan terms ranging between 12 and 72 months; and invest in a range of other loan products designed to avail access to finance, aimed towards poverty alleviation, employment creation, and rural development."
Moreover, during the 2023/2024 financial year, the fund, through an ecosystem-based adaptation project funded by the Green Climate Fund, will provide grants amounting to N$120 million to at least 36 different community-based organisations for climate change adaptation, resilience and capacity building.
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