US $200m deal has been issued to finance for renewable energy in South Africa. This comes after the International Finance Corporation (IFC), a member of the World Bank Group signed a partnership with Nedbank to increase financing for renewable energy projects in the country.
“While the immediate future calls for solutions to the economic difficulties caused by the VIDC-19 pandemic, it is essential that we seize this opportunity to rethink the structure of our economies, to build a fairer, more resilient and low-carbon future,” said Adamou Labara, IFC Country Director for South Africa.
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South Africa’s climate finance market
The loan agreement is part of the IFC’s efforts to develop South Africa’s climate finance market and support the South African government’s plan to move to a low-carbon economy. South Africa has set a target of reducing its greenhouse gas emissions by 42% by 2025 and diversifying its power generation to reduce its reliance on coal by 2050.
Nedbank on its part is committed to the projects as part of their engagement engage in alternative climate finance mechanisms. As the first carbon neutral bank on the African continent, Nedbank became in 2019 the first commercial bank in South Africa to launch a green bond on the Johannesburg Stock Exchange.
“This transaction demonstrates Nedbank’s commitment to engage in alternative climate finance mechanisms that will further develop markets and support projects that create positive impacts aligned with UN sustainable development goals,” said Arvana Singh, Head of Sustainable Financial Solutions at Nedbank.