Moderator:
Kaikham Onedamdy, Operations Officer, Climate Finance, International Finance Corporation (IFC)
Speakers:
Francisco Avendano, Operations Officer, International Finance Corporation (IFC)
Claire Hobbs, Chief Treasurer, Bank Windhoek
Dirk Dijksma, Head of Innovation Investments, Symbiotics
Hari Rajagopal, Vice President, Capital Markets and Strategic Initiatives, Samunnati
Background
This session focuses on providing a fundamental understanding of what green bonds are, how they are a good instrument to mitigate climate change and how they can be used to bridge the gap in financing for SMEs for green projects and to spur innovation in the sector.
Key takeaways
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GB are long-term fund-raising instruments that banks and government can use to raise funds to finance projects with identified sustainable impact.
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Bank Windhoek, largest bank in Namibia, is the first bank to issue a green bond in SA and an alumni of GB TAP program.
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With the help of IFC, they worked on a GB framework for solar installations, approached investors and raised 4.5 million USD in their first green bond
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How to measure the societal impact beyond the green gas emission reduction?
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Further commitment to issue a sustainable bond (first one in SA) who was issued in 2020. This bond looks at jobs, healthcare and education, not just solar polar.
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Creating GB raised the bank brand and they didn’t encounter any issues finding investors
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Symbiotics SA is a sustainable asset manager that provides debt funding to micro finance institutions in emerging markets
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In 2019, they started green bond after taking a course with GB tap
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They focused on smaller size bonds
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Added sustainable (for SBV platform) to their impact bonds.
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A lot of benefits for the investees: reduce expenses to issue those bonds, benefit from our experience from the eligibility assessment
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16 sustainable bonds since June 2020 for a total of 175 million USD in value
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Samunnati is an agri-value chain enabler that combines consumer financial institutions with market linkage and advisory services
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In the last 7 years, they delivered 1 billion USD in agrifinance
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They issued their first green bond but before that they helped their customers with a road map to help them become climate smart.
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5 million USD for the green bond: first such green bond in India focusing on agrifinance
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Helped finance MSMEs and cooperative to finance working capital: non-water intensive crop, irrigation, solar pump
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GB can finance renewable energy, climate smart agriculture and many other projects.
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Those are still big tickets and capital intensive. SMEs request smaller financial amounts for their day-to-day activity: compressor, packaging......
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GB can be used for SMEs, but we need more data to avoid green washing
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Possible solutions: eco certification, but only those who are credible
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Governments offer more and more green bonds that could cover SMEs' needs
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Agri SMEs have fluctuations in their performance: a lot of the production is lost between the farm and the table because of limited packaging and limited storage
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Green storage and sustainable cold chain could be financed with GB. This will reduce the SME risk profile.
Words of Wisdom
“We’re very proud to be the first issuer of [Green Bonds] in Southern Africa. A sustainable Bond was also a first for us as well.” Claire Hobbs, Chief Treasurer of Bank Windhoek.
“I think a lot of different parties needed to be educated on what the green bonds mean… The educational part is very important, and I think it really ties with the local requirements.” Dirk Dijksma, Head of Innovation Investments, Symbiotics.
