Achieving a net zero economy requires urgent, unprecedented action and cooperation from all stakeholders. Acknowledging the swift action required and the sheer size of wallet that would be needed to strategically finance the transition Nedbank has once again approached the investment market to raise ‘use-of-proceeds’ green finance, this time through the issuance of the first listed green additional tier 1 instrument by a financial institution in Africa.
The equivalent notional amount of funding raised through the green additional tier 1 issuance will be directed strategically to support the financing of new green infrastructure projects in South Africa and reinforces the fact that Nedbank is committed to supporting climate transition.
A total of R910 million was raised through the issuance which took place in June 2021, bringing the total green/climate-related funding secured by Nedbank between 2019 and 2021 to approximately R 8,6 billion. This has been achieved through a combination of ZAR renewable-energy bonds, green tier 2 instruments, climate related USD loan facilities and the new green additional tier 1 instrument.
According to Arvana Singh, Nedbank Corporate and Investment Banking’s Head of Sustainable Finance Solutions: ‘The structured green “use-of-proceeds” funding mechanism has enabled Nedbank to unlock infrastructure and impact investor funds in addition to traditional investor funds.’ She says that these funds are becoming more conscious of environmental, social and governance issues and are starting to value the need to invest in instruments that support technologies or infrastructure that can meaningfully contribute to change and a more climate resilient future.
‘The notional equivalent of this funding unlocked from these additional funds will be channelled to increase our financing to clients looking to develop large scale renewable energy projects,’ says Singh. ‘We are continuously looking to innovate our funding mix so that we can play our part in delivering a greener economy and supporting the United Nations Sustainable Development Goals. These instruments are another example of this and represent our climate strategy in action.’