Development bank targets more green financing

The Development Bank of Namibia (DBN) is intensifying its green financing efforts to support the country’s goals for green industrialisation and sustainability.

In an interview with Desert Radio yesterday, DBN chief executive John Steytler said: “Our focus on renewable energy and environmentally sustainable projects aligns our loan portfolio with the country’s climate action commitments.”

Steytler said these efforts are part of the DBN’s Integrated Strategic Business Plan aimed at fostering sustainable economic growth.

“We have secured two green credit lines from the German Development Bank (KfW), and our next priority is achieving accreditation from the Green Climate Fund to unlock additional concessional funding for this sector,” he said.

Steytler said concessional funding from multilateral and bilateral institutions is a cornerstone of the DBN’s funding strategy, allowing it to offer competitively priced financing for development projects with substantial developmental impact.

“We currently have active lines from institutions such as the African Development Bank (AfDB) and KfW, and are advancing discussions with AfDB for a second credit line. We are also engaging with the French Development Agency and the Italian Development Bank to diversify and expand our concessional funding portfolio,” he said.

A key part of the bank’s strategy involves enhancing product development to benefit previously disadvantaged groups, especially women and youth, with 30% of the DBN’s loan book approvals to be dedicated to these groups by 2029.

“The DBN is continuously expanding its offerings to better serve women, youth and small and medium enterprises (SMEs). We have partnered with the Ministry of Gender Equality, Poverty Eradication and Social Welfare to launch an apex lending microfinance product for women,” he said.

Additionally, the bank’s skills-based facility offers financing to young professionals and artisans under the age of 35 for both start-ups and existing businesses.

“Alongside financing, we provide technical support, mentorship and coaching, aiming to bridge financial access gaps, support entrepreneurship and drive economic inclusion,” Steytler said.

Meanwhile, the bank’s non-performing loans (NPLs) increased by 2% in the 2023/24 financial year.

“The increase in NPLs can largely be attributed to persistent economic recovery challenges impacting key sectors within our loan portfolio, including tourism, manufacturing and business services.

“In response, the DBN is enhancing its end-to-end credit risk management approach spanning from credit origination and rehabilitation to collections and recovery,” Steytler said.

He said the DBN is also implementing targeted restructuring programmes, such as business rescue initiatives, and working closely with clients to develop tailored repayment solutions that help manage their financial obligations.

The DBN demonstrated resilience in the 2023/24 financial year amid challenging economic conditions, he said.

“The bank sustained its lending activities and continued to support priority sectors that drive national developmental goals.

While certain financial targets were demanding, our accomplishments in areas such as capital adequacy, concessional funding and SME support demonstrate the bank’s dedication to fostering economic growth and supporting the economy’s key drivers,” Steytler said.

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