Standard Bank, IFC partner on $300mn green finance fund

Standard Bank, in collaboration with the International Finance Corporation (IFC), has announced a new finance facility comprising around $300 million US dollars, which equates to approximately R6 billion in South Africa. The funds are earmarked for sustainable loans towards green and social assets, with a focus on renewable energy and affordable housing home loans. The partnership aims to support projects with positive environmental and social impacts. Sasha Cook, Head of Sustainable Finance at Standard Bank, shared insights on the deal during a recent interview with CNBC Africa. Cook highlighted the significance of the $300 million tier 2 loan with the IFC, emphasizing the 10.5-year facility structure underpinned by two pools of eligible assets. One pool focuses on renewable energy assets, particularly solar renewable energy assets in South Africa, contributing to decarbonization efforts. The second pool targets affordable housing home loans for consumers falling within the affordable housing income threshold. Notably, an emphasis on women borrowers is also integrated into the affordable housing home loans component, aligning with Standard Bank's commitment to financial inclusion and diversity. Cook further revealed that the allocation split between renewable energy and affordable housing home loans is roughly 50-50, illustrating the partnership's balanced approach towards environmental and social causes. The transparent and publicly available sustainable finance framework developed by Standard Bank outlines detailed eligibility requirements and exclusions for each category, ensuring compliance with green financing standards. The framework has undergone an independent review by Sustainalytics, enhancing its credibility and alignment with sustainability principles. In line with Standard Bank's sustainability strategy, which includes a commitment to mobilize over 250 billion rand in sustainable finance from 2022 to 2026, Cook emphasized the organization's progress towards this ambitious goal. By mobilizing over 105 billion rand by the end of 2023, Standard Bank has demonstrated strong momentum in driving positive environmental and social impact projects. The focus on renewable energy financing and affordable housing home loans within the broader mobilization strategy underscores Standard Bank's dedication to fostering sustainable growth and inclusive finance practices. Cook emphasized that while specific targets exist for renewable energy financing, efforts to monitor and track the number of women borrowers in affordable housing home loans remain a priority. Standard Bank's commitment to transparency, inclusion, and sustainable finance underscores its position as a key player in driving green and social investments in South Africa and beyond. As customers seek to tap into the renewable energy and affordable housing pools, adherence to the established eligibility criteria and benchmarks will be crucial for accessing green financing and contributing to sustainable development initiatives.