Renewable energy

South Africa’s Nedbank secures US$64.5mn to finance green projects

Financial services group Nedbank has secured R910mn (US$64.5mn) to finance green infrastructure projects in South Africa.

The capital raise comes as the South African government is driving renewable energy in the country to boost energy security.

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This, as power utility Eskom, which provides over 90% of South Africa’s power needs, has battled to keep the lights on, much to the detriment of the economy.

In a statement, Nedbank says a total of R910mn (US$64.5mn) was raised through the issuance, which took place in June 2021, bringing the total green or climate-related funding secured by the bank between 2019 and 2021 to approximately R8.6bn (US$590.3mn).

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The amount was achieved through a combination of South African Rand renewable energy bonds, green tier-two instruments, climate-related USD loan facilities, and the new green additional tier one instrument, says Nedbank.

In March 2021, Nedbank received a US$200mn (R2.9bn) loan from the International Finance Corporation, a member of the World Bank, to drive renewable energy projects in South Africa.

In 2020, the big four banks unveiled a R2bn (US$137.3mn) tier two capital instrument on the Johannesburg Stock Exchange to support renewable energy investments in the country.

According to Arvana Singh, Nedbank Corporate and Investment Banking Head of Sustainable Finance Solutions: The structured green funding mechanism has enabled Nedbank to unlock infrastructure and impact investor funds in addition to traditional investor funds.”

She said these funds are becoming more conscious of environmental, social, and governance issues, and are starting to value the need to invest in instruments that support technologies or infrastructure that can meaningfully contribute to change and a more climate-resilient future.

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