The primary driving force of the economy of Namibia is extraction and processing of minerals. This is supported mainly by fisheries, agriculture and tourism. The Government of Namibia aims to achieve economic diversification based on the principles of protecting its environment, mitigating and adapting to climate change and initiating steps to create a low carbon and sustainable economy. One of the major impediments is the availability of institutionalized funding schemes for supporting the natural resources management including managing of mining, promoting green industry, introducing eco-tourism, investing in environmental research, training and education and other initiatives needed to achieve the government’s goal of sustainable development. 

To address this impediment, the government established a dedicated institution – the Environmental Investment Fund (EIF) of Namibia under the Act of Parliament. The purpose of EIF is to raise funds and provide financial resources for the economic development of Namibia that is also environmentally sustainable. EIF raises funds through environmental levies and also manages several environmental related revenue collections on behalf of the government and charges a management fee. The second major source is through creating an endowment fund that provides EIF a permanent source of funding.

Since green project finance was not offered by financial institutions in Namibia, The market - both on the supply and demand side - was not developed. EIF identified this gap in the market and recognized the need to take immediate steps for providing financial resources to tackle climate change and environmental degradation. 

To achieve its objectives of creating an environmentally sustainable Namibia, EIF developed and launched a range of financial instruments to finance the green projects in the country. One of the major features of EIF Financial Instruments is its focus on community based activities such as for protecting community forests, adapting to climate change, promoting the use of renewable sources of energy in communities, introducing water efficiency, managing local waste and recycling and greening of tourism industry. In addition, the EIF loans are charged only at 4% interest rate compared to about 10% interest rates available in the market. The affordability of green loans is one of the key pre-requisites to accelerate the green movement in Namibia. 

Further to its own loaning scheme, the EIF also provides interest rates subsidies on loans from commercial banks to the sponsors of green projects

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