DBN credit line for climate-relevant infrastructure investments

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As part of the FC project, a credit line is granted to refinance climate-relevant investments in infrastructure projects with a focus on renewable energies, water and transport. The project sponsor is the state-owned Development Bank of Namibia (DBN). For the credit line, the DBN has been promised a low-interest loan (FC development loan) of up to EUR 15 million with a term of 12 years with up to 3 grace years. The equivalent of the loan in euros will be paid out as a local currency loan in South African rand. The aim of the FC measure is the sustainable use of the financing offer provided by the DBN for investments in climate-relevant infrastructure measures with a focus on renewable energies, water and transport (FC measure objective, outcome). The credit line enables the DBN to provide long-term financing in local currency to private and public investors who want to invest in climate-relevant infrastructure projects. This is intended to support the DBN on its institutional growth path so that it can fulfill its role as the leading state infrastructure and climate bank in Namibia in the medium term and stimulate the expansion of the lending business for climate-relevant investments. By providing long-term financing options for climate-relevant infrastructure measures that are currently not available on the local capital market, the project is contributing to the broadening and deepening of the financial system in Namibia and thus contributing to sustainable economic development. By promoting climate-relevant infrastructure measures, the project is also contributing to improved climate and environmental protection (DC program objective, impact). The target group of the credit line are private and public investors who are pursuing projects in the areas of renewable energies, water and transport. The objectives of the FC measure thus fit into the overall objective of Namibian-German development cooperation in the focus area of sustainable economic development, which is to achieve broad-based economic growth supported by the private sector and at the same time increase the availability of financing in Namibia. This objective is being pursued on the FC side by setting up financial institutions. The loan is accompanied by an accompanying measure of up to EUR 0.5 million (FZ grant). As part of the accompanying measure, a software-based credit and risk management system is to be introduced and the existing environmental and social impact management system is to be linked to this system. Furthermore, the environmental and social impact standards of the DBN are to be adapted to the IFC Environmental and Social Performance Standards and the DBN is to be supported in setting up the new business area in the area of climate and environmental financing. The credit line is to be expanded by EUR 30 million to a total of EUR 45 million as part of Phase II (stock check).