Nicola Mawson
FIRSTRAND’S corporate and investment arm, RMB, facilitated deals worth about R155 billion in sustainable and transition finance in Africa between 2021 and 2023, as companies implement renewable energy, energy efficiency, and decarbonisation projects.
RMB, which operates in 35 African countries, established its sustainable finance business three years ago and has set a target of facilitating R200bn in sustainable finance/transition finance by 2026. When this is achieved, it will set an additional target.
Among the deals RMB has been involved with was the first syndicated sustainability linked loan in Africa for Mediclinic Southern Africa, which needed to refinance its existing R6.65bn loan facilities and preference shares of R1.8bn. For this transaction, it was lead arranger.
RMB yesterday said it also provided the first green loan in the African real estate sector for Equites Property Fund. Equites required R225 million in funding for the development and construction of two high specification IFC Edge-certified green buildings.
The UN Environment Programme noted that sustainable investment is predicted to rise to $53 trillion by 2025, which will represent a third of global assets under management, creating a vast opportunity for the investment banking industry.
Yet, in a 2023 World Investment Report (Investing in Sustainable Energy for All), UN secretary-general António Guterres said the world’s least developed countries rely on external sources for almost three quarters of their energy investment. “But they may pay up to seven times more than developed countries to access international capital markets.”
The report also found that, in a review of investment needs at the midpoint of the 2030 Agenda for Sustainable Development, an investment gap across all Sustainable Development Goals had increased from $2.5trln in 2015 to more than $4trln a year today.
The largest gaps are in energy, water and transport infrastructure and are the result of both underinvestment and additional needs, it said.
In a statement, Nigel Beck, head of sustainable finance and ESG at RMB, said that, since establishing its sustainable finance business more than three years ago, its clients had committed to several targets in areas such as reducing direct and indirect greenhouse gas emissions, installing renewable energy, reducing water consumption, as well as reducing waste.
Other commitments RMB’s clients have made are in terms of gender equity by creating promotion and recruitment opportunities for about 14 000 women.
Over the last two years, RMB has collaborated with a range of clients, including energy intensive users such as Sibanye, Anglo American, Sasol, Harmony, and Richard’s Bay Minerals, as well as leading independent power producers like Aced, Mainstream, Red Rocket, Sola Group, EDF Renewables, Engie, G7, and Scatec in providing solutions.
“Spread across the economy and many companies, the growing impact of greater sustainability is encouraging. African companies are embracing their future,” Beck said.
Towards the end of last year, Just Share evaluated South Africa’s top five commitments and scoring on key indices that painted a clearer picture of the bank’s commitment to decarbonisation through their funding activities and governance metrics.
The report noted that none of the top five South African banks “is tackling climate risk robustly” when assessed against the goals of the Paris Agreement.
BUSINESS REPORT