Standard Bank secures R5.7 billion for renewables and affordable housing in South Africa

Standard Bank has announced that it has closed a $300 million (~R5.68 billion) sustainable Tier 2 capital loan to help fund various green and social plans – including renewable energy projects across South Africa.

Standard Bank said the funding will be allocated to a portfolio of green and social assets – with a specific focus on renewable energy and affordable housing sub-categories.

The facility is structured as a 10.5-year term loan.

“Standard Bank is focused, primarily through its sustainable finance division, on providing financial products and services that support positive sustainability outcomes.

“This includes green and social loans and bonds, sustainability-linked loans and bonds, sustainable trade and working capital solutions and impact investing,” the bank said.

“This facility, earmarked for green and social projects, particularly renewable energy and affordable housing, is in line with our commitment to support and promote South Africa’s transition to a low-carbon, climate-resilient economy,” said Adamou Labara, IFC Country Manager for South Africa.

“Our partnership with Standard Bank is a testament to our shared vision of a sustainable future and our dedication to advancing economic growth in the country.”

Kenny Fihla, Chief Executive of Corporate and Investment Banking at Standard Bank Group, said, “The successful conclusion of this $300 million sustainable loan provides financial resources to enable the bank to continue supporting our customers on their Social and Environmental journeys.

“We are delighted to partner with the IFC and drive positive impact across the continent.”

Standard Bank’s renewable plan for South Africa

Demand in South Africa, in particular, has increased exponentially since the government lifted the cap on private generation projects at the beginning of the year.

The mining sector is the major player in building large renewable projects to mitigate the effects of load-shedding and diversify their energy streams away from fossil fuels.

To meet this demand from large clients looking to go completely off-grid in South Africa, Standard Bank funded over 1,800 MW worth of renewable energy projects.

The bank also provided over R2 billion in loans to small businesses to help them access alternative energy sources. Over R145 million was disbursed to individuals to install solar in South Africa.

Demand for home solar solutions in South Africa jumped 400% last year, with Standard Bank’s LookSee growing its lending to nearly R3 billion.

This forms part of the bank’s overall target of R250 billion in sustainable financing by the end of 2026. So far, it is 42% of the way to completing this target.

Read: South Africa’s big banks expected to feel the pain in 2024