Nedbank has procured a $200 million loan to propel the establishment of renewables in South Africa

The International Finance Corporation (IFC) has loaned $200 million to Nedbank, which will see the company develop and implement renewable energy projects in South Africa. The corporation did this to fulfill what the World Bank required it to do. The chief of sustainable finance solutions at Nedbank’s Corporate Investment Banking (CIB), Arvana Singh, stated that this amount would enable the company to complete the stagnant projects, expand its climate mitigation platform and develop the renewable energy infrastructure to facilitate the transition of the country to green energy. The highlight came a week after Gwede Mantashe, the minister of mineral resources and energy, launched the bidding campaign for the Renewable Energy Independent Power Producers Procurement Programme. This program will secure an additional 2600MW of renewable energy from various power suppliers.

The minister added that the project would unveil the strategy that will pump R45 billion into the South African economy as an investment in clean energy. Singh emphasized that the deal between Nedbank CIB and the IFC is a loan contract and a representation of the World Bank, offering an alternative path for the country’s progress. The projects will facilitate the minimization of greenhouse gas emissions, create employment opportunities for the renewable energy sector and help in the actualization of some Sustainable Development Goals. Last year witnessed the company sends its R2 billion to trade on the Johannesburg Stock Exchange (JSE) to facilitate renewable energy investment in South Africa.

Nedbank stated that this financial instrument is the first to be deployed in the JSE and will be categorized under the Green Bonds segment. The company added that the entity was established with the help of the African Development Bank. Experts analyzed the loan and stated that it could be the key to unleash a robust, sustainable climate finance market in the country to meet the goal of reducing carbon emissions to zero. The South African government hopes to reduce greenhouse gas emissions by 42 percent before 2026, which implies that it would be pressing towards the elimination of fossil-fuel dependency. The country is working towards an economy that is sustained by renewable energy sources or other emission-free energy sources.

Singh added that the IFC loan could help innovators establish advanced technology that relies on clean energy. One of the requirements for this to be effective is developing smart appliances since they are ideal for this situation. The country can copy Europe and roll out electric vehicles in commercial quantities to reduce the tonnes of emissions that come from the transportation sector.