Standard Bank has issued R1.4bn in 10-year green bonds to help finance renewable energy projects in SA, it said in a statement on Friday.
The note, which is listed in the JSE’s sustainability segment, is the third debt instrument to be issued under Standard Bank’s sustainable bond framework established in February 2020 that directs funding towards projects aligned with the group’s social, economic and environmental strategy.
Standard Bank said the 10-year instrument was its first local second-tier capital-qualifying green bond to be issued.
The bank, Africa’s biggest lender by assets, also expanded the size of its social bond programme by issuing an additional R1.5bn in the securities earlier this week. This is on top of the R2bn in social bonds issued in August, the proceeds of which were used to finance mortgage loans in the affordable housing target market with a focus on women borrowers.
“These are landmark transactions for the group as they represent further firsts for us from a bond issue perspective in our sustainable finance journey,” said Ann Hunter, head of strategic funding at Standard Bank.
“We are consistently leveraging work done and broadening our issue base under the sustainable bond framework. Sustainable finance markets and products are evolving quickly and, as an issuer, we recognise the urgency, opportunities and responsibilities.”
Standard Bank’s latest bond issuance follows the listing of its first green bond on the London Stock Exchange in March 2020. The $200m 10-year bond was issued to fund eligible green assets in SA.
Banks and asset managers are under pressure from lobbyists and shareholder activists to shift to a more socially conscious form of stakeholder capitalism that prioritises environmental, social and governance (ESG) issues.
That has resulted in banks and asset managers either announcing that they will begin phasing out funding for carbon-intensive projects such as thermal coal mines, or saying they will charge a premium to finance such initiatives. In addition, they are also increasing funding for projects with strong ESG underpinnings.
“Sustainability has taken centre stage in the market’s investment and capital allocation decisions, leading to exponential growth in the sustainable finance market,” said Kenny Fihla, CEO of corporate & investment banking at Standard Bank.
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