Financial services provider Nedbank Corporate and Investment Banking (CIB) says a recent agreement with the International Finance Corporation (IFC) will contribute to enhancing the investment scales in favour of sustainable development in the future
Nedbank CIB sustainable finance solutions head Arvana Singh explains that the $200-million loan facility procured by CIB will help to complement Nedbank’s established green-finance operations, grow its climate portfolio and expand its support of renewable-energy projects that are key to the continued evolution of South Africa’s green economy.
For reference, Nedbank notes that, at the end of 2020, the progress reports delivered by most of the countries that have committed themselves to the achievement of the United Nations Sustainable Development Goals (SDGs) by 2030 “made for difficult reading”.
This is because most of the reports revealed that several countries were experiencing a variety of challenges that had caused them to fall behind on their planned SDG trajectories, the bank says.
This is especially true in developing economies, where contributing to the SDGs is generally constrained owing to a lack of implementation capacity, which requires substantial financial resources, it points out.
Nonetheless, Singh says the partnership between Nedbank CIB and the IFC is more than just a loan facility and that it represents an endorsement by a member of the World Bank Group of Nedbank’s “proven leadership” in the funding of renewable-energy projects.
Such projects, she says, are helping South Africa transition to cleaner power, reduce its greenhouse-gas (GHG) emissions, create jobs in the renewables sector and contribute meaningfully to the achievement of the SDGs.
She adds that the loan agreement aligns with the shared commitment of the IFC and Nedbank to contribute to the development of a robust and sustainable climate finance market in South Africa that, in turn, will underpin national government’s strategic objective of moving the country to a lower-carbon economy.
The South African government has a stated target of reducing the country’s GHG emissions by 42% by 2025, an achievement that requires a “step change” in energy production from fossil-fuel dependency to large-scale reliance on renewable resources, she says.
“This transition, within tight time constraints, demands access to innovative funding mechanisms such as the IFC loan.”
Singh also highlights that the loan affords Nedbank the opportunity and leverage it needs to add much more value to the renewables sector and the country’s sustainable development efforts in general.
“At Nedbank CIB we see our role in terms of South Africa’s sustainable development journey as money experts who do good,” she states, adding that the bank also believes it has significant value to offer in terms of its reach and influence as a financial institution, its experience in renewables and other sustainable projects, and its “proven commitment” to partnering with all stakeholders in the country’s green economy to unlock shared value and benefits.
Singh explains that investment capital unlocked by the IFC partnership means that Nedbank CIB has the opportunity and means to expand its reach as a “sustainable development champion”, enabling the much-needed rollout of renewable-energy projects at scale in the coming years.
“Most importantly, doing so in a way that also delivers a lasting positive social and environmental impact.”