SOUTH AFRICA – The International Finance Corporation (IFC0, a member of the World Bank Group, will provide Absa Bank, one of Africa’s largest financial services groups, with a loan of up to US$150 million to support the bank’s strategy to expand its climate finance business and help South Africa meet its greenhouse gas reduction targets.
Africa’s first certified green loan, announced by the International Finance Corporation to Absa Bank, would increase funding for biomass and other renewable energy projects in South Africa, supporting the country’s power sector and economic recovery from Covid-19.
The loan was the first certified loan in Africa that complied with the Green Loan Principles, which meant that lending by Absa for green projects would be disclosed.
In addition to the loan, the IFC would provide technical advice and knowledge sharing to help the bank develop a green, social, and sustainable bonds and loans framework.
“Africa’s green transition requires considerable mobilization of funds,” said Jason Quinn, Absa Interim Group Chief Executive.
“The agreement with IFC bolsters our funding available for green projects and strengthens Absa’s position as a leader in financing renewable projects in South Africa,” he said.
“Financial institutions and the private sector have an important role to play helping South Africa to rebuild greener and more sustainably from the impact of Covid-19”Adamou Labara – IFC Country Manager for South Africa
Absa said it was the leader in arranging financing for South Africa’s Renewable Independent Power Producer Programme, having structured and arranged financing for about 46 percent of projects concluded under the programme to date.
Other banks are also targeting climate change.
In May 2021, Nedbank came out with a target of zero emissions by 2050 while Standard Bank is currently under fire from its shareholders for its lack of disclosure and measured targets around climate change.
“Financial institutions and the private sector have an important role to play helping South Africa to rebuild greener and more sustainably from the impact of Covid-19,” said Adamou Labara, the IFC’s country manager for South Africa.
“By increasing funding for renewable energy and climate smart projects we can help South Africa strengthen its climate change resilience and increase climate change adaptation,” he added.
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