Development Bank opens climate change adaptation financing
The Development Bank of Namibia (DBN) has announced a facility to finance climate change adaptation, provides an affordable and tailored financing solution for climate and environmentally friendly projects.
The Bank has previously financed low-carbon renewable energy generation, water reclamation for industrial use in Walvis Bay, water storage in Neckartal Dam and reclamation initiatives.
DBN CEO Martin Inkumbi said financing for climate adaptation is important, and there is a range of affordable financing instruments for such business projects.
The Bank, he said, has already pioneered financing models for renewable energy, and is now setting its sights on, energy and water use efficiency as well as mitigating the effects of rising temperatures.
The Bank has financed large scale water infrastructure such as Neckartal Dam and Aqua Utilities which semi-purified water for industrial use at Walvis Bay.
“However, in the face of prolonged droughts, there is an opportunity for enterprises to invest in water efficiency. Investing in technology and processes that are energy and water-efficient reduces the amount of energy and water consumption per output for a business, which lowers production and or operational costs and improves profitability. Although water efficiency will not alleviate drought, it can lead to improvements in enterprises bottom line, in addition to preserving the environment,” Inkumbi said.
He added that the Bank has experience in water reticulation for local authorities and PPPs but said there was still scope for further development in terms of water recycling, reclamation and storage in abattoirs.
On the topic of rising temperatures, Inkumbi noted that there is a twofold cost. The first cost is the cost of cooling facilities, and the second cost is the cost of mitigating health issues caused by rising heat. The cost of cooling facilities adds to the cost of an enterprise. It also places a burden on power generation. By constructing plants and facilities with heat dissipation in mind, these circumstances can be mitigated.
He extended the benefits of energy-efficient housing developments, explaining that incorporating heat dissipation would reduce the cost of running a household as well as improving the health of its residents. This, Inkumbi said would dovetail well with the Bank’s finance for affordable housing projects.
Asked about how the facility would benefit enterprises and initiatives, Inkumbi said that there is an understandable reticence to finance projects with unfamiliar financing outcomes.
“This was the case when DBN pioneered finance for privately-owned renewable energy. The Bank, however, de-risks innovative projects with extensive due diligence on innovation and absorbs, manages and learns from its risks. In this way, the Bank hopes to pioneer finance for climate change adaptation that will make Namibia more sustainable,” Inkumbi said.