South Africa: IFC invests USD 200 million in LSE listed green bond

IFC, a member of the World Bank Group, has invested $200 million in the Standard Bank of South Africa Limited’s green bond placed on the London Stock Exchange.

This bond is the largest of it’s kind in Africa and South Africa’s first such offshore issuance, which will increase access to climate finance.

The 10-year facility privately placed by IFC is compliant with the International Green Bond Principles and will enable Standard Bank Group’s Sustainable Finance Business Unit to on-lend to and finance climate-smart projects in South Africa such as renewable energy, energy efficiency, water efficiency and green buildings.

“This bond is a landmark placement for South Africa and will contribute to financing South Africa’s green economy. We hope it will catalyse interest in green investments from other actors in the country,” said Adamou Labara, IFC’s country manager for South Africa.

Commercial banks currently provide 45% of South Africa’s financing for renewable energy and energy-efficient projects.

IFC estimates that South Africa’s climate-smart investment potential, between now and 2030, is $588 billion.

“When it comes to financing, clients should be considering green, social and sustainable products as investors increasingly shift their mandates to sustainable businesses,” said Nigel Beck, Standard Bank Group’s executive head of sustainable finance.

Projects funded by the green bond have the potential to reduce greenhouse gas emissions by 742,000 tons per year, or nearly 3.7 million tons over a five-year period, IFC estimates.

The IFC is one of the world’s largest issuers of this type of bond, with 172 issues in 20 currencies, totalling more than $10 billion.

The financier is a member of the Green Bond Principles and is part of its Executive Committee, which, combined with its experience as an issuer and investor in green bonds, has allowed us to support several countries globally to shape the standards and guidelines of green bond issues.