Agribank adds biomass to its loan portfolio

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AGRIBANK is rolling out a biomass value chain finance program, which was operationalized earlier this year, to meet the bank’s loan portfolio diversification objective.

So said Agribank Chief Executive Raphael Karuaihe when the financial institution signed a memorandum of understanding with the Namibia Biomass Industry Group (N-BiG) yesterday in Windhoek.

“The signing of the Memorandum of Understanding with N-BiG, as the Namibian biomass sector industry association, comes at an opportune time,” he said.

“As a bank, we are delighted to be in this partnership as it directly relates to our strategic objectives,” he said in a statement released by the bank’s head of public relations, Fillemon Nangonya.

N-BiG’s managing director, Progress Kashandula, described the cooperation agreement as “a major milestone in efforts to develop the bush biomass sector in Namibia, through a public-private cooperation approach”.

“Furthermore, the biomass sector has the potential to contribute to socio-economic development and an inclusive bio-economy for Namibia,” he said.

Agribank is a public company that promotes agriculture and related activities by lending funds to individuals and financial intermediaries through the provision of affordable, innovative and inclusive financing solutions. N-BiG is a not-for-profit industry association representing a wide range of members active in the bush biomass sector in Namibia with the vision to shape the future of bioenergy and bio-based products in Namibia.

The scope of the cooperation agreement includes cooperation in the development and modification of financing products aimed at scaling up bush control and biomass utilization projects, and the sharing of data necessary to develop loan products that meet market needs. N-BiG will provide expertise through the advisory services component, particularly on risk assessment of bush control and biomass utilization loans. Other areas of cooperation include technical support in the development, sensitization and integration of tools for bush management and biomass use by industry/farmers such as biomass and feed formulation.

The two institutions will also organize training for existing and potential farmers, individuals and small and medium enterprises interested in bush control and biomass utilization activities, including current Agribank loan holders.

Another area of ​​cooperation is the monitoring and evaluation of bush control and biomass use activities. The biomass industry has the potential to improve groundwater flow, refine rangeland productivity, create sustainable jobs and provide farmers with the opportunity to diversify sources of income.

In addition, the industry will encourage climate-smart agricultural practices. The agreement is valid for five years, from August 2022 to July 2027, with an option to renew.

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