DURBAN – Nedbank has become the first bank in South Africa to list a Renewable Energy Bond on the green segment of the JSE.
The instrument, which opened for auction on 24 April, was developed by Nedbank in line with International Capital Market Association Green Bond Principles and the Climate Bonds Standard thereby contributing to limiting global warming, Nedbank will apply the investment proceeds from the new bond to deliver financial support to solar and wind renewable energy projects that have been identified by the bank as having the potential to deliver positive, long-term sustainable energy outcomes for the country.
According to Bruce Stewart, Head of Debt Capital Market Origination at Nedbank CIB, the issue of the Renewable Energy Bond forms a key part of Nedbank’s commitment to delivering tangible financial support to projects that contribute towards the achievement of the UN’s Sustainable Development Goals (SDGs).
He said: "As a bank with a stated purpose to use our financial expertise to do good for individuals, families, businesses and society, Nedbank has committed itself to contributing meaningfully to the achievement of the SDGs and this new Renewable Energy Bond is a key way in which we are transforming that sustainable development intent into tangible action."
Stewart said, in line with this sustainable development commitment, Nedbank has recently undergone a process of aligning its commercial activities with the SDGs, the result of which has been the commitment of a significant portion of the bank’s lending book towards sustainable activities, particularly in the renewable energy space.
"Nedbank has been a key supporter of, and participant in, the SA Department of Energy’s renewable energy independent power producer procurement programme (REIPPPP) and, to date, we have funded 42 of the transactions, worth R40bn, across the four rounds of the programme, he points out, so, this Renewable Energy Bond builds on our well established experience in the renewables sector and allows us to extend our support of clean energy provision in South Africa through an innovative, SDG-focused capital market solution," said Stewart.
According to Stewart, investor response to the auction of the Nedbank Renewable Energy Bond was overwhelmingly positive and new investors are particularly attracted by the sustainability focus. The auction was significantly over subscribed, and the final pricing exceeded expectations which evidenced a strong benchmark for green bonds going forward.
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