The International Finance Corporation (IFC) and Redefine Properties have issued a green bond, with the IFC investing about R750m to help the company accelerate its sustainability journey.
Redefine will use the bond’s proceeds to reduce energy and water consumption and make other positive environmental improvements across its portfolio of industrial, retail and office properties.
“This green bond diversifies our funding portfolio and amplifies our commitment to placing environmental, social and governance (ESG) at the heart of what we do,” said Ntobeko Nyawo, Redefine CFO.
The oversubscribed maiden green bond raised R1.5bn at an auction on September 16.
Redefine is a JSE-listed real estate investment trust (Reit) which owns a diversified property portfolio in SA and Poland.
With the real estate sector estimated to generate about 40% of global carbon dioxide emissions, the bond will help Redefine reduce its carbon footprints and achieve net zero carbon status by 2050, it said.
The green bond, the second issued by a Reit in SA, aligns with the International Capital Market Association Green Bond Principles. It was listed on the JSE in the sustainability segment, a platform for companies to raise debt for green, social and sustainable initiatives.
The IFC’s investment will be used exclusively to refinance existing green buildings with a Green Star 4 category certification — a tool used to rate the environmental impact of buildings, as defined by the Green Building Council of SA, or the equivalent.
Adamou Labara, IFC country manager in SA, said the partnership is in line with the organisation’s strategy to support climate-smart infrastructure projects in the real estate sector.
“The green bond demonstrates the critical role that capital markets can play in crowding-in more investors for climate-focused financing. This will ultimately support SA’s aspirations to transition to a low-carbon economy,” said Labara.
The IFC is the largest global development institution focused on the private sector in emerging markets. For the 2022 financial year, IFC committed $32.8bn to private companies and financial institutions in developing countries.
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