The International Finance Corporation (IFC), a member of the World Bank Group has granted US$200 million to Nedbank to bolster the latter’s green finance operations and finance renewable energy projects. The funding will help the country in its quest to transition to cleaner forms of power, reduce greenhouse gas emissions, and create jobs in the renewables sector.
This transaction continues to demonstrate Nedbank’s commitment to engage in alternative climate finance mechanisms
Arvana Singh, Nedbank’s Head of Sustainable Financial Solutions
Nedbank is Africa’s first carbon-neutral bank and in 2019 became South Africa’s first commercial bank to launch a green bond on the Johannesburg Stock Exchange.
“These (climate finance mechanisms) will further develop markets, and support projects which create positive impacts aligned to the United Nations Sustainable Development Goals, in pursuit of Nedbank’s commitment to building a greener and cleaner economy,” said Arvana Singh, Nedbank’s Head of Sustainable Financial Solutions.
SA’s renewables centric COVID-19 recovery plan
Financing and investments in renewable energy is going to be very crucial for South Africa’s COVID-19 economic recovery plan. The government is hoping to tap international investments in its renewable energy centred COVID-19 economic recovery plan.
South Africa’s world renowned Renewable Energy Independent Power Procurement Programme (REIPPPP) attracted $13.7 billion (200 billion rand) over 10 years and created thousands of green jobs.
Adamou Labara, IFC’s Country Manager for South Africa, said, “While the immediate future calls for solutions to the economic damage caused by COVID-19, it is critical that we take this opportunity to re-think the structure of our economies, to build a fairer, more resilient, low-carbon future. Working with our partners to develop a strong climate finance market is an important part of this process.”
New additional capacity
South Africa is set to procure 11GW of new energy capacity over the coming year of which 6,8GW will be purely renewables with the rest being natural gas, storage, coal. This is according to the recent announcement by the nation’s president Cyril Ramaphosa during his annual State of the Nation Address (SONA) in parliament.
This will be by far the largest procurement of new renewable energy capacity in a single year since the beginning of the government’s renewable energy independent power producer procurement programme (REIPPPP) ten years ago.
South Africa has already procured 2 000 MW of new “emergency power” this year under a programmed branded “Risk Mitigation Independent Power Purchase Programme” (RMIPPP).
IFC estimates South Africa’s climate-smart investment potential across renewable energy and urban infrastructure, including rail transport, electric vehicles, and green buildings, amounts to $588 billion through 2030. The government plans to more than double the country’s power capacity by 2030, with renewables making up as much as 20 percent of the mix.
