Project Description
This summary describes equity investments by FirstRand EMA Holdings (Pty) Ltd (FREMA), a wholly owned subsidiary of FirstRand Limited (FirstRand or the group), through FirstRand Namibia Limited in its subsidiary First National Bank Namibia Limited (FNB Namibia or FNBN). FREMA owns 58% of FirstRand Namibia Limited, which in turn owns 100% of FNBN. The Guarantee Holder or investor is FREMA. The investor has applied for MIGA guarantees of up to USD [111.58] million covering mandatory and voluntary reserves for a period of up to 3 years.
FirstRand South Africa-based is one of the largest financial services groups in Africa by market capitalization. The group is based in South Africa and also has subsidiaries in eight countries in Sub-Saharan Africa. Its subsidiary banks outside of South Africa are required to maintain reserves at the central banks in their respective jurisdictions, based on the volume of customer deposits that these subsidiaries have. Mandatory and voluntary reserves contribute to FirstRand’s overall risk-weighted assets (RWA) at the consolidated level, consuming a level of capital that could have otherwise been deployed in productive assets.
The proposed MIGA guarantee builds on a previous 2020 transaction in which MIGA issued guarantees covering FirstRand’s subsidiaries in Botswana, Eswatini, Ghana, Lesotho, Mozambique, Nigeria, and Zambia.
Environmental Categorization
FNBN provides retail and corporate banking services to clients across Namibia. The MIGA guarantee will support FNBN’s lending operations to micro, small, and medium enterprises (MSMEs). MSME activities are considered to be mostly medium risk, with potentially limited adverse E&S risks and impacts that are site-specific, reversible, and can be addressed through mitigation measures. This project is thus categorized as FI-2 in accordance with MIGA’s Policy on Environmental and Social Sustainability (2013).
The main E&S aspects of this project relate to FNBN’s ability to identify, assess, and manage the E&S risks and impacts associated with its MSME lending activities, and the management of labor matters by the bank. The applicable E&S requirements for the MIGA project portfolio are: (i) MIGA’s Exclusion List; and (ii) applicable national environmental and social laws and regulations in Namibia.
MIGA analyzed FNBN’s portfolio for types of transactions, industry sectors, and exposure to MIGA’s Exclusion List. As of December 2025, FNBN’s portfolio included the following business segments: retail banking and consumer loans, commercial and corporate finance, MSME finance, and project finance. The main sectors supported include real estate, agriculture, business services, finance, public sector, transportation, manufacturing, and trade. FNBN currently has limited exposure to activities on the MIGA Exclusion List. FNBN also has exposure to oil and gas projects, and no exposure to coal. MIGA’s guarantee will support MSME loans, and upstream oil and gas and coal-related activities will be excluded.
MIGA also analyzed FNBN’s E&S risk management procedures and emergency preparedness procedures in line with the requirements of Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts (PS1), and FNBN’s labor practices in line with the requirements of Performance Standard 2: Labor and Working Conditions (PS2).
In relation to E&S risk management, FirstRand has been an Equator Principles financial intermediary since 2009 and has developed an internal guideline, which describes the environmental and social risk assessment (ESRA) process and is applicable to all subsidiaries. Each subsidiary also has an ESRA policy that includes a detailed procedure for identifying, assessing, and managing the E&S risks and impacts associated with clients’ activities. FirstRand Group has policy statements on the financing of thermal coal and sensitive sectors. The group also has an exclusion list, which is in line with the MIGA Exclusion List.
In line with the group procedure, at FNBN, transactions are screened against the applicable E&S requirements as part of the bank’s credit approval process, and E&S mitigation measures are identified to address any gaps. E&S covenants, as well as specific monitoring covenants where applicable, are also included in facility agreements, and transactions are monitored to ensure compliance with agreed conditions. The procedures also include the application of the Performance Standards, where applicable. The process is adequate for the management of E&S risks and impacts of MSME transactions in line with MIGA’s requirements. FNBN has an external communication mechanism for receiving and addressing E&S concerns raised by third parties regarding projects financed by FNBN.
MIGA reviewed FNBN’s emergency response procedures and found them to be in line with the requirements of PS1. In relation to PS2, MIGA’s assessment revealed that FNBN’s labor policies and procedures are in line with the requirements of PS2. The bank’s policies and procedures cover among other aspects, terms of employment, occupational health and safety, non-discrimination, harassment, freedom of association, and a grievance mechanism.
For the proposed guarantee, FNBN will report annually to MIGA regarding the implementation of the E&S procedures for the project portfolio, as well as its labor practices.
Development Impact
The aim of MIGA’s proposed guarantees is to help FirstRand reduce the risk of some of its assets in the relevant subsidiaries, which would lead to a reduction in the group’s RWA on a consolidated basis. FirstRand plans to deploy additional capacity related to the RWA reduction in Namibia, thus increasing the potential reach, development impact, and financial returns of the foreign investment. In particular, the freed-up capital is expected to support increased lending to MSMEs, a segment with significant unmet financing needs in Namibia.
MIGA’s proposed coverage to FirstRand (through FREMA) is aligned with the most recent World Bank Group’s Country Partnership Framework for Namibia (FY25–FY29), as it seeks to promote private-sector-led growth via increased access to finance in the country and to promote sustainable investments.
