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Nedbank raises R910m to finance green projects in SA

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Big-four bank Nedbank has raised R910 million 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.

This, as power utility Eskom, which provides over 90% of SA’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 R910 million 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 R8.6 billion.

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

In March, Nedbank received a $200 million (R2.9 billion) loan from the International Finance Corporation, a member of the World Bank, to drive renewable energy projects in SA.

Last year, the bank unveiled a R2 billion 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 says 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.

“The notional equivalent of this funding unlocked from these additional funds will be channelled to increase our financing to clients looking to develop large-scale renewable energy projects,” says Singh.

“We are continuously looking to innovate our funding mix so that we can play our part in delivering a greener economy and supporting the United Nations Sustainable Development Goals. These instruments are another example of this and represent our climate strategy in action.”

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