March 2 2020

Standard Bank Sells Green Bonds in Biggest African Sale Yet

Source: Bloomberg

Standard Bank Group Ltd.’s South African unit sold a $200 million green bond to the International Finance Corp. in the largest sale of its kind from the continent yet.

The 10-year facility will be used to finance projects in renewable energy, energy efficiency, water efficiency and the development of environmentally friendly buildings, the Johannesburg-based lender said in an email. The debt will be listed on the London Stock Exchange, making it South Africa’s first offshore green-bond issuance, it said.

The deal comes amid a global push toward sustainable debt, with record sales in 2019 as investors increasingly factor in the environment and climate change. Commercial banks currently provide 45% of South Africa’s financing for renewable energy and energy-efficient projects, according to the IFC, which estimates that the country has a “climate-smart investment potential” of $588 billion between now and 2030.

“We hope it will catalyze interest in green investments from other actors in the country,” IFC South Africa Country Manager Adamou Labara said in a statement. Projects funded by the bond have the potential to reduce annual greenhouse gas emissions by 742,000 tons, or nearly 3.7 million tons over a five-year period, according to IFC estimates.

Acorn Project (Two) LLP, a closely held, Nairobi-based property developer and manager, raised 4.26 billion shillings ($41 million) in a debut Kenyan green-bond offering in October last year. Standard Bank’s Stanbic Bank Kenya Ltd. was the lead arranger for that deal.