WINDHOEK, Oct. 17 (Xinhua) -- The Bank of Namibia, the central bank, on Thursday launched the country's first broad-based Sustainability Framework designed to integrate climate risks into the financial system and drive green finance.

Speaking at the Thought Leadership conference themed "Leveraging Innovation for Green Finance" in Windhoek, the Namibian capital, Governor Johannes Gawaxab stressed that climate change poses a significant threat to economic and financial stability and called for urgent action.

Namibia, one of the most arid countries in sub-Saharan Africa, is facing rising temperatures, erratic rainfall patterns, and more frequent drought, all of which are negatively impacting key sectors such as agriculture, mining, and manufacturing, he said.

Climate change is already altering the structure of Namibia's economy, with both physical and transition risks threatening the value of financial assets, he said, noting the projected economic costs are significant, with the World Bank estimating that climate change could reduce Namibia's gross domestic product (GDP) by up to 6.5 percent annually if Namibia fails to act.

The Sustainability Framework aims to help financial institutions adapt to these risks by embedding sustainability in their operations and policies and will guide banks, insurance companies, and other institutions in mitigating climate risks while capitalizing on opportunities linked to the green transition, he said.

With limited government funds, Gawaxab said private capital would be essential for financing the transition to a low-carbon economy.

"This calls for innovative approaches to unlock and mobilize funds. Blended finance will play a key role in addressing the climate finance gap, particularly in developing economies, like ours, which contribute a negligible percentage of global emissions and yet are disproportionately vulnerable to the effects of climate change," he said.

According to him, the framework is part of Namibia's broader strategy to align its financial system with sustainability goals, ensuring that the country is well-positioned to weather future climate and economic shocks. Enditem

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