SOUTH AFRICA: Nedbank issues green bonds for renewable energy

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SOUTH AFRICA: Nedbank issues green bonds for renewable energy©lightrain/Shutterstock

For the first time in South Africa, a private bank issued green bonds to support the development of green energy. Thanks to Nedbank's initiative, four South African projects will be developed in solar and wind energy.

In the coming months, one wind farm and three solar farms will be built on South African soil. They will be financed by Nedbank. To this end, the South African bank launched green bonds at the end of April 2019 to raise $117 million. The operation, however, generated close to $380 million in offers, or a subscription rate of 300%, in less than two weeks… A little overwhelmed by the success, the bank’s managers nevertheless explain that the operation was such a success, because the money was to be used to promote the development of renewable energies.
For Bruce Stewart, head of the bank’s debt markets origination, the green bond issue was “widely subscribed, demonstrating investors’ appetite for good quality assets, for environmentally friendly or socially and governance-oriented projects. »
These bonds were listed on the green segment of the Johannesburg Stock Exchange (JSE). They were conducted in accordance with the green bond principles of the International Capital Market Association and the Climate Bonds Standard. With this achievement, Nedbank becomes the first private institution in South Africa to issue a green bond to finance renewable energy.
Nedbank has also demonstrated a significant commitment to green energy financing in South Africa. The bank is one of the players that contributed to the implementation of the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) set up by the South African Department of Energy. To date, the bank has already financed nearly 42 projects through this programme, for a total investment of nearly $2.7 billion.

Luchelle Feukeng

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