The International Finance Corporation (IFC), a member of the World Bank Group, has agreed to provide up to 200 million dollars to finance renewable energy projects in South Africa. This is the purpose of the loan agreement that the financial institution signed on December 21st, 2020 with Nedbank of South Africa. “While the immediate future calls for solutions to the economic difficulties caused by the VIDC-19 pandemic, it is essential that we seize this opportunity to rethink the structure of our economies, to build a fairer, more resilient and low-carbon future,” said Adamou Labara, IFC Country Director for South Africa.
The loan agreement is part of the IFC’s efforts to develop South Africa’s climate finance market and support the South African government’s plan to move to a low-carbon economy. South Africa has set a target of reducing its greenhouse gas emissions by 42 per cent by 2025 and diversifying its power generation to reduce its reliance on coal by 2050.
Within Nedbank, the need to manage this new flow of green finance to South Africa is not seen as a coincidence: “This transaction demonstrates Nedbank’s commitment to engage in alternative climate finance mechanisms. This transaction demonstrates Nedbank’s commitment to engage in alternative climate finance mechanisms that will further develop markets and support projects that create positive impacts aligned with UN sustainable development goals,” said Arvana Singh, Head of Sustainable Financial Solutions at Nedbank. As the first carbon neutral bank on the African continent, Nedbank became in 2019 the first commercial bank in South Africa to launch a green bond on the Johannesburg Stock Exchange.
Boris Ngounou