Nedbank Group wants to almost double its lending to green energy projects in South Africa over the next two years as it seeks to cement its position as a market leader in funding renewable power projects.<\/p>\n
The bank\u2019s lending toward the government\u2019s Renewable Independent Power Producer Program – aimed at boosting privately generated electricity in the nation – may jump to about R50 billion($3 billion) in the \u201cshort-to-medium term\u201d from 29 billion rand, said chief executive officer Mike Brown.<\/p>\n
\u201cWe would certainly have appetite for it to go higher if client demand is more than that,\u201d Brown, 56, said in an interview at Nedbank\u2019s office Friday. \u201cWe need masses of new energy.\u201d<\/p>\n
Demand for funding renewable power projects is likely to surge after president Cyril Ramaphosa unshackled the private sector in a bid to end an energy crisis that\u2019s been holding back Africa\u2019s most-industrialized economy.<\/p>\n
The government scrapped a 100 megawatt limit on private power generation, allowing companies to produce electricity without a license to meet their own needs and sell to the grid.<\/p>\n
The state also doubled renewable-energy procurement to 5,200 megawatts under the so-called bid window six tender to help accelerate the country transition from a dependence on coal for more than 80% of its power, toward greener energy sources.<\/p>\n
Authorities are rushing to avoid a repeat of recent blackouts – power utility Eskom Holdings cut enough electricity to light up 4 million South African homes – that riled residents.<\/p>\n
Nedbank has been a market leader in previous rounds of the auctions, said Brown. About 10% of Nedbank\u2019s R1 trillion balance sheet has been advanced to projects that meet United Nations sustainable development goals, he said.<\/p>\n
\u201cWe absolutely think that working with advising and financing our clients as they change their energy mix and that of the countries they operate in over the next 10 to 20 years is a massive opportunity for us and one that we absolutely aim to continue to lead in,\u201d Brown said.<\/p>\n
Nedbank has risen 24% this year making it South Africa\u2019s best-performing bank share. They rose 0.7% on Friday.<\/p>\n
Beyond South Africa, the lender sees opportunities in the liquefied natural gas discovered in Mozambique even though projects in the region have been delayed due to attacks by an Islamic State affiliate in the northern part of the country. The insurgence has resulted in thousands of fatalities and the displacement of people since the violence began in 2017.<\/p>\n
\u201cI am sure all the sponsors will be re-evaluating when and how to start up again, in particular, given what\u2019s happening globally,\u201d Brown said. \u201cI think it makes the LNG deposits even more attractive than they previously were, if those security issues can be solved.\u201d<\/p>\n