DBSA & PIMCO close first deal in UNECA SDG7 program

The Development Bank of Southern Africa (DBSA) and Pimco, the largest bond fund in the world, have successfully raised R3 billion to finance green energy projects in Africa as part of the UNECA SDG7 program. This groundbreaking deal marks a significant milestone in supporting the continent's energy transition and promoting sustainable development. Boitumelo Mosako, Chief Financial Officer of DBSA, shared insights on the collaboration and the impact it will have on fostering green initiatives across the region. The partnership between DBSA and Pimco under the umbrella of UNECA signifies a pivotal moment in addressing the funding gap for green energy projects in Africa. Mosako emphasized the importance of this transaction not only for South Africa but for the entire continent, demonstrating that such programs can be effectively implemented and yield positive results. The decision to conduct the transaction in the local currency reflects a strategic approach to financing sustainable projects and driving economic growth within the region. The collaboration with Pimco, renowned for its substantial assets under management amounting to $2.2 trillion, highlights the credibility and resilience of DBSA as an institution. Mosako outlined the key factors that influenced Pimco's participation, including DBSA's strong governance, resilient balance sheet, and strategic positioning within the market. Additionally, DBSA's successful issuance of a 200 million euro green bond further reinforced its commitment to environmental sustainability and facilitated access to funding for green initiatives. Mosako elaborated on the significance of leveraging financial facilities such as the 200 million euro bond to refinance existing green projects and unlock liquidity for new ventures. The focus on growing the green book aligns with DBSA's just transition framework, emphasizing sustainable growth and responsible financial practices. The expansion of green projects beyond South Africa to the rest of the continent underscores DBSA's commitment to driving environmental impact and supporting sustainable development across sub-Saharan Africa. In terms of project eligibility for the three billion facility, Mosako highlighted water and renewable energy projects that require refinancing in South Africa and the broader region. The collaboration aligns with UNECA's mandate to promote sustainable development goals, particularly SDG number seven, focusing on affordable and clean energy access. The competitive pricing of the funding remains confidential, yet Mosako assured that it is favorable for participants and will facilitate the implementation of green energy projects. The supportive regulatory environment in South Africa, exemplified by the successful IPP program and ongoing efforts to enhance energy security, provides a conducive platform for organizations like DBSA to drive green financing initiatives. With substantial investments in the energy sector and ongoing government support, DBSA is well-positioned to catalyze sustainable development and contribute to achieving green energy targets in the region. The collaboration with Pimco and UNECA marks a significant milestone in advancing the green energy agenda in Africa and underscores the critical role of financial institutions in driving sustainable growth and environmental stewardship.