The International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, has signed a new partnership with Standard Bank. The South African bank will obtain a $250 million credit facility to finance renewable energy and sustainable housing in South Africa.
Standard Bank is set to increase its portfolio of green financing in South Africa over the next few years. In any case, this is the aim of the partnership signed recently with the International Finance Corporation (IFC), the subsidiary of the World Bank Group responsible for financing the private sector. As part of this partnership, the IFC plans to set up a loan facility of up to $250 million for Standard Bank. The facility consists of a $21.4 million trust loan under the One Planet Managed Co-Lending Portfolio Program (MCPP).
The IFC is contributing a loan of $228.6 million. According to the investment company headed by Senegalese Makhtar Diop, Standard Bank will use this financing to expand its climate financing portfolio. This will be achieved through broader support for renewable energy projects, particularly wind and solar farms. Like most South African banks, Standard Bank is very active in this fast-growing sector.
Financing sustainable housing
The bank headed by Lungisa Fuzile has, for example, granted $241 million in debt to Norwegian independent power producer (IPP) Scatec for the construction of its Grootfontein solar farms, with a combined capacity of 273 MW. In addition to clean energy, the bank will also use these funds to widen access to housing finance, by reserving at least 50% of mortgages for women first-time buyers.
Read also- SOUTH AFRICA: Standard Bank to raise $17bn for green finance by 2026
According to the IFC, this financing will help to remedy the country’s growing housing shortage, which is estimated at 3.7 million homes. Yet, according to official figures, South Africa has a well-developed housing market with a mortgage financing rate of 16.3%, which is higher than the sub-Saharan African average of 5.1%. “However, a large proportion of mortgages are granted to higher income segments”, laments the IFC.
The partnership between the IFC and Standard Bank “is part of the Group’s commitment to our goal: Africa is our home, and we are driving its growth by financing sustainable growth on the continent in the key areas of renewable energy and affordable housing”, says Kenny Fihla, Managing Director of Standard Bank Group’s corporate and investment banking arm.
Jean Marie Takouleu
