IFC Invests $200 Mn in Africa’s Largest Green Bond

IFC, an arm of World Bank, has invested about USD 200 million recently in the green bond issuance of Standard Bank of South Africa placed on the London Stock Exchange (LSE).

Standard Bank Group is the largest African bank by assets having presence across 20 African countries.

This is Africa’s largest green bond and South Africa’s (SA) first offshore green bond issuance, which is aiming to increase access to climate finance.

Commenting on the development, Adamou Labara, IFC’s Country Manager for South Africa, said that “this bond is a landmark placement for South Africa and will contribute to financing South Africa’s green economy. We hope it will catalyze interest in green investments from other actors in the country.”

This is a 10-year green bond facility privately placed by IFC, and is compliant with the International Green Bond Principles.

IFC is one of the world’s largest green bond issuers, with 172 issues in 20 currencies, with aggregating over USD 10 billion.

IFC said in a statement that this bond will help in enabling Standard Bank Group’s Sustainable Finance Business Unit to on-lend to and finance climate-smart projects in SA for example renewable energy, energy efficiency, water efficiency and green buildings.

“When it comes to financing, clients should be considering green, social and sustainable products as investors increasingly shift their mandates to sustainable businesses,” said Nigel Beck, Standard Bank Group’s executive head of Sustainable Finance.

Currently, commercial banks provide 45 percent of SA’s financing for renewable energy and energy-efficient projects.

However, IFC has estimated approx. USD588 billion as SA’s climate-smart investment potential between now and 2030.

Projects funded by the green bond have the potential to reduce greenhouse gas emissions by 742,000 tons per year, or nearly 3.7 million tons over a five-year period, IFC estimates.

In FY 2019, IFC has delivered over USD 19 billion in long-term financing for developing countries.