SOUTH AFRICA: Redefine issues $85m green building bond

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SOUTH AFRICA: Redefine issues $85m green building bond ©Redefine Properties

In South Africa, real estate investment company Redefine Properties has successfully completed an $84.8 million green bond supported by the World Bank Group's International Finance Corporation (IFC). The deal increases the availability of finance to stimulate the South African green building market.

According to the World Bank, South Africa needs $7 billion of investment in green housing. With this in mind, the Bank’s private sector financing arm has subscribed to a R750 million ($42.4 million) green bond issued by property investment company Redefine Properties.             The deal was aimed at raising R1.5 billion, or $84.8 million. The proceeds of the bonds will be used to finance the green buildings.

Specifically, the funds raised from investors will enable Redefine to reduce its energy and water consumption in order to achieve carbon neutrality in its buildings by 2050. This includes buildings and industrial space that house over 4,000 tenants and employ 195,000 people.

“IFC’s investment will be used exclusively to refinance existing green buildings with a four-star Green Star certification, which is a tool used to assess the environmental impact of buildings as defined by the Green Building Council South Africa (GBCS),” says Redefine.

IFC’s support for the green transition

According to experts, the real estate sector generates about 40% of global carbon dioxide (CO2) emissions. Redefine’s investments are expected to contribute to the fight against global warming in the Rainbow Nation. Its achievements will be verified through the IFC’s Excellence in Design for Greater Efficiencies (EDGE) label, which facilitates the design and certification of resource-efficient and CO2-free buildings.

Read also-SOUTH AFRICA: IFC lends $38 million to Business Partners for green buildings

“The partnership with Redefine is in line with our strategy to support climate-smart infrastructure projects in the South African real estate sector,” says Adamou Labara, IFC’s Country Director for South Africa.

As a reminder, in January 2022, Nedbank, a bank owned 50% by Old Mutual, also issued a 1.09 billion South African rand (about $120 million) green bond, in partnership with the IFC, to finance environmentally sustainable housing in South Africa.

Benoit-Ivan Wansi

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