In a statement, Nedbank says a total of R910 million (US$64.5 million) was raised through the issuance, which took place in June 2021, bringing the total green or climate-related funding secured by the bank between 2019 and 2021 to approximately R8.6 billion (US$590.3 million).
The amount was achieved through a combination of South African Rand renewable energy bonds, green tier-two instruments, climate-related USD loan facilities and the new green additional tier one instrument, says Nedbank.
According to Arvana Singh, Nedbank Corporate and Investment Banking Head of Sustainable Finance Solutions: “The structured green funding mechanism has enabled Nedbank to unlock infrastructure and impact investor funds in addition to traditional investor funds.”
She said these funds are becoming more conscious of environmental, social and governance issues, and are starting to value the need to invest in instruments that support technologies or infrastructure that can meaningfully contribute to change and a more climate-resilient future.
Arvan Singh – Head of Sustainable Finance Solutions, Nedbank
“The notional equivalent of this funding unlocked from these additional funds will be channeled to increase our financing to clients looking to develop large-scale renewable energy projects,” says Singh.
“We are continuously looking to innovate our funding mix so that we can play our part in delivering a greener economy and supporting the United Nations Sustainable Development Goals. These instruments are another example of this and represent our climate strategy in action.”
At a time when sustainability issues are rising in importance for all South African banks, Nedbank has led the way in terms of its commitment to environmental, social and governance goals and this green agenda is vital in a country that is prone to drought, is Africa’s biggest polluter, heavily reliant on coal for its electricity and in desperate need of a rapid increase in its power generation capacity.
Three years ago, Nedbank marked itself out by publicly committing to stop funding new thermal coal power plants and it has already disbursed R31 billion (US$2.13 billion) towards South African renewable energy plants.
Following new shareholder resolutions in May 2020, it has now committed to stop funding new thermal coal mines from 2025, even in South Africa; to stop new finance for oil production by 2035, and to exit all exposure to fossil fuel-related activity by 2045.