Banks work behind the scenes to keep the lights on

While the South African Reserve Bank has flagged rolling blackouts as a huge non-financial risk to the economy, corporate South Africa and the big banks, in particular, are working behind the scenes to ensure business continues uninterrupted.
Based on funding commitments for rounds one to four, Nedbank Corporate Investment Banking is funding about R35-billion into the Renewable Energy Independent Power Producer Programme (REIPPPP) and has helped introduce 3,517MW of new energy into the grid. A Nedbank spokesperson noted that the round five projects had not yet closed and round six had not yet been awarded so only projects from round one to four were currently contributing power into the grid.
Read more in Daily Maverick: “Load shedding is the biggest non-financial risk facing the SA economy – Reserve Bank”
Arvana Singh, head of sustainable finance at Nedbank says there are a number of examples that demonstrate the bank’s ability to unpack impact in the investment space. “Being at the forefront of sustainability and as a leading global sustainable products innovator, we continue to form new partnerships and look for new opportunities to unlock. We recently concluded a $350-million sustainability-linked loan in the international capital markets, which has been well supported by our lender group,” Singh said.
Nedbank has been a forerunner in the space as the first arranger of green renewable energy bonds back in 2019. Green bonds are fixed-income instruments that help companies raise capital for investing in climate and environmentally friendly projects while enabling investors to buy into these instruments. These bonds are typically asset-linked and backed by the issuer’s balance sheet.
The investment proceeds from the first green bond in 2019 were used to deliver financial support to solar and wind renewable energy projects. Singh said that in 2020, Nedbank issued the first green tier to capital and in 2021, it was the first bank on the African continent to issue a green additional tier one instrument.
“Later in 2021, we issued a R1.09-billion green residential development fund, which actually employs blend finance characteristics as well,” she said. Nedbank’s total amount of green bond issuance on the JSE as at the end of December 2021 was R6.8-billion.
Massive uptick
The First Rand TCFD (Task Force on Climate-Related Financial Disclosures) report reveals that First National Bank (FNB) financed 40MW of small-scale embedded generation over the past four years. Kyle Durham, head of sustainable finance and ESG solutions at FNB Business says the bank is seeing a ...