Proparco And Investec Join Forces on Climate Investments
“We are very proud and excited for this first cooperation between Proparco and Investec, a leading South African bank resolutely committed to sustainability. We trust Investec’s expertise and capacity to innovate, coupled with the financing package provided by Proparco, will help bring climate finance one step further in South Africa,” Emmanuelle Riedel Drouin, Global Head of Lending Operations at Proparco announced.
Proparco and Investec Bank have come into a partnership to implement the Transforming Financial Systems for Climate (TFSC) program in South Africa.
The package comprises a senior credit facility of $80m and a technical assistance program.
TFSC is a global facility worth $650m, covering 17 countries.
The TFSC program will invest in key development areas such as affordable housing, renewable energy, low carbon and efficient energy generation climate-smart agriculture and water smart infrastructure. Supporting financial institutions in South Africa’s transition, in light of poverty, equity and unemployment challenges, which have been exacerbated by the impacts of Covid-19 pandemic.
South Africa has set an ambitious goal of reducing carbon emissions by 42% by 2025 and diversifying its electricity production away from coal by 2050. To participate in this goal, Proparco, on behalf of AFD Group, just provided a $80 million climate finance-dedicated credit facility to Investec.
TFSC aims to support South Africa’s pathway to a low-carbon economy and climate resilient society within a its context and in alignment with AFD Group’s broader objectives.
After the collaboration with FirstRand Bank Limited, announced in October 2022, marking the launch of AFD Group’s TFSC program in South Africa, Investec is now the second bank to have joined the program.
This transaction is built on a long-standing partnership between AFD Group and the FirstRand group, especially through several projects targeted at supporting players operating in key sustainable development sectors in South Africa.
The transaction aims to support Investec in its efforts to expand climate-related financing in South Africa, thanks to a long-term senior credit facility of $80m, complemented by a Technical Assistance package under the TFSC program.
This operation is also Investec’s first cooperation with a development finance institution such as Proparco.
Investec Bank has been a pioneer institution in the adoption of sustainability objectives and their integration into a comprehensive governance and reporting system. It is also the first bank in South Africa (and one of the first internationally) to have signed-up to the Task Force on Climate-related Financial Disclosures (TCFD) in 2019.
The transaction will contribute to South Africa’s transition to a low-carbon economy by enabling Investec to finance ambitious projects aligned with the highest climate finance standards both in terms of mitigation and adaptation.
Investec Group’s Head of Sustainability, Tanya Dos Santos-Ford said, “After a thorough process of engagement, we are delighted to announce this partnership with Proparco, which enables us to make a meaningful advancement in our joint climate ambitions.”
“Investec remains steadfast in our commitment to a fair, efficient and inclusive energy transition. This senior credit facility enables us to provide further finance and support for both our clients – as they progress their climate ambitions – and for our country as we help to build a more climate resilient and equitable South Africa.”