Standard Bank has issued its first-ever green bond through a private placement with development finance institution, the International Finance Corporation (IFC).
The $200-million bond, which is Africa’s largest green bond and South Africa’s first offshore green bond issuance, has been listed on the LSE and will be used to finance eligible green assets that are aligned to Standard Bank’s sustainable bond framework.
Green assets include renewable energy, energy efficiency, water efficiency and green buildings.
“This bond is a landmark placement for South Africa and will contribute to financing South Africa’s green economy. We hope it will catalyse interest in green investments from other actors in the country,” says IFC South Africa country manager Adamou Labara.
Commercial banks currently provide 45% of South Africa’s financing for renewable energy and energy-efficient projects.
The IFC estimates South Africa’s climate-smart investment potential, between now and 2030, is $588-billion.
“This bond issue reflects Standard Bank’s strategic focus on sustainable finance in line with our social, economic and environmental value drivers and vision to drive Africa’s growth with minimal adverse impact.
“Our strategy aims to embed social, economic and environmental considerations into our borrowing, lending and business practices in a way that helps us to continue supporting our clients, while producing value for society at large,” comments Standard Bank CE Sim Tshabalala.
Standard Bank sustainable finance executive head Nigel Beck adds that when it comes to financing, clients should be considering green, social and sustainable products, as investors increasingly shift their mandates to sustainable businesses.
“Standard Bank is at the forefront in Africa with an innovative and dedicated sustainable finance business offering that benefits clients, communities, the environment and the corporate governance landscape.
“The bond showcases the role that capital markets can play in mobilising climate-smart finance and we hope it will inspire more companies in South Africa to unlock investment for climate-related projects,” says IFC Southern Africa and Nigeria regional director Kevin Njiraini.