How is ESG being integrated at the highest levels of dealmaking? Sasha Cook, Head of Sustainable Finance at Standard Bank South Africa, gives the inside scoop
Sustainable finance is an exhilarating, constantly evolving space, and it’s getting bigger by the day. From loans and bonds to working capital and supply chain financing, we’re seeing it play an ever-greater role in the deals that we’ve recently closed at Standard Bank.
So, what are the areas in which we’re seeing the biggest push for dealmaking sustainable finance solutions? Perhaps the most vibrant is renewable energy. In first half of 2023, we have already closed major deals across South Africa’s green energy space.
We facilitated the funding of three onshore wind projects for Red Rocket, with total expected installed capacity of 364 megawatts. Elsewhere, we funded three solar photovoltaic (PV) projects for Scatec, with an expected installed capacity of 273 MW.
We also funded a 100MW project for ARM Platinum and a 66MW solar energy project for Exxaro at one of their coal mines. Behind the numbers is real impact – the Exxaro deal will result in a 36% emissions reduction at the mine.
All of these are significant contributors towards shifting South Africa’s reliance on coal-powered energy, which makes up 80% of the national energy mix.
That’s not all – we’re also partnering with corporates as they roll out renewable energy solutions. We recently executed a green funding package for GoSolr to support their rollout of residential solar PV installations.
Another key area is conservation. We facilitated a funding package for Wilderness Safaris, who operates 60 safari camps across eight countries, and their business is structured to reinvest their ecotourism revenues into conservation and biodiversity projects. They currently have more than 6 million acres of land under conservation, and they plan to double that over the coming decade.
The big S in ESG
But it is not just profound environmental impact that underpins the benefits of sustainable finance, it also fuels positive social impact. Take South Hills, an integrated residential development project south of the Johannesburg CBD which will provide affordable housing to more than 30 000 individuals.
Standard Bank has committed to funding a fourth phase that will provide 320 additional affordable housing units, which are also being developed in line with International Finance Corporation (IFC) Edge requirements and will have reduced energy and water usage benefits.
Another example is the Kenyatta-Mzimba roads development project in Malawi – we provided funding for a project that will upgrade an existing road into Malawi’s first ever 6-lane highway and offer key access to a local hospital.
All aboard the ESG revolution
When it comes to sustainability and ESG, organisations are increasingly under pressure to publish climate-related disclosure reports. This makes the availability, reliability and consistency of data a critical focus area.
And that’s a challenge, because this kind of information has historically not been as readily available as financial data. However the development of frameworks, taxonomies, policies and guidelines is all helping.
Sustainability is clearly no longer the remit of just a handful of people sitting in a separate team; it’s a core competency that organisations need to invest in to remain relevant and ensure their competitiveness.
