Namibia: Finance for a Sustainable Future

The Development Bank of Namibia's (DBN) Head of Lending, John Mbango, says, the bank's values, which describe sustainability, place emphasis on socially equitable and environmentally responsible business initiatives. These, he says, will have a long-lasting, positive impact on the economy.

Although the bank focuses on larger enterprises and infrastructure, the bank's track record shows that it places a strong emphasis on the well-being of broader society and the environment. In terms of social initiatives, the bank supports social entrepreneurship, particularly in the fields of education and health. This, Mbango says, is matched by a history of generous donations to initiatives which do not qualify as recipients of finance, such as schools and community initiatives. In terms of the environment, he points to numerous projects that include water reclamation at the coast, recycling and renewable energy.

Mbango says that sustainability involves a narrow focus on the middle- to long-term social and environmental costs of operations financed by the bank. To illustrate the point, he says that the bank might be approached to finance a factory which has high levels of polluting emissions, but this would come at a high cost to future generations in the form of occupational diseases to workers and next door neighbours caused by the operation, as well as degradation of the environment in the operation's area of influence.

This potential liability to the future, he says, is being mitigated by an environmental and social management system (ESMS) recently implemented by the bank which is made up of a policy framework, procedures and operational standards which give guidance and strategic direction to DBN clients.

In terms of applications for finance, Mbango says that the ESMS closely adheres to various sets of legislation and regulations at the local and national levels and international best practices. This, he says, points to the fact that the bank's ESMS is not an additional requirement for borrowers, but rather a ratification that applicants adhere to requirements stipulated by law, which applicants will have to adhere to in order to obtain a social licence to operate.

Practical management for the bank and its applicants

Mbango says that the bank categorises and manages applications according to low, medium and high-risk environmental and social categories. In the low-risk category, he says, the bank requests compliance with local environmental, occupational health, safety and labour laws. In terms of the bank's ESMS, low-risk projects are not likely to directly or indirectly affect the environment adversely and are unlikely to induce adverse social impacts.

Source: New Era.