Nedbank CIB has identified renewable energy as having the potential to deliver positive, long-term sustainable outcomes for South Africa and the continent. Accordingly, Nedbank fully supports national and global efforts to invest in the energy transition by funding renewable energy projects that will help curb carbon emissions and the effects of global warming.
Nedbank CIB is the leading funder of renewable energy projects on the African continent. This is evident from our commitment to fund 42 projects in South Africa through the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
The bank has pledged to continue supporting efforts to develop cleaner energy sources and build a sustainable economy. Its primary focus is to redirect investment funds towards cleaner energy alternatives. In addition, the bank is committed to aligning its business strategy, policies, mandates, and incentives with the Paris Agreement.
As part of Nedbank’s journey as a purpose-led business, in using its financial expertise to do good, the bank recognises that meeting the Paris Agreement objectives will require, among other interventions, full decarbonisation of the global energy system by mid-century, and that an orderly exit from fossil fuel financing is necessary well before 2050 given the long lifetimes of the physical assets.
While Nedbank sees the potential role of natural gas in facilitating the transition to a zero-carbon energy system, it aims to have withdrawn entirely from fossil fuel extraction activities by 2045.
Nedbank will instead scale up its market-leading commitment towards the fast-growing corporate and industrial renewable energy projects sector. Furthermore, on the back of the changes to the legislative framework increasing the capacity of these projects to 100 MW, Nedbank will step up its embedded generation financing to accelerate the transition and aims to achieve a market-leading position in this sector.
Nedbank has been at the forefront of investing in renewable energy for over 10 years in anticipation of the increasing calls from climate activists to move away from funding fossil fuel energy projects.
According to Nedbank’s Head of Sustainable Finance Solutions, Arvana Singh, Nedbank is taking the lead to help move South Africa forward towards a greener economy. This has been evidenced by Nedbank being the first bank in South Africa to list a renewable energy bond in the green segment of the JSE in 2019. Nedbank developed the instrument in line with the International Capital Market Association Green Bond Principles and the Climate Bonds Standard, thereby raising and directing funding towards activities that would help limit global warming. Subsequently, Nedbank has issued a green tier 2 instrument in 2020 and a green additional tier 1 instrument in 2021, further signalling its commitment to finance renewable energy activities.
Nedbank uses the investment proceeds from the new bond to deliver financial support to solar and wind renewable energy projects that it has identified as having the potential to provide positive, long-term, sustainable energy outcomes for the country.
According to Brad Maxwell, Managing Executive for Investment Banking at Nedbank CIB, the issuing of the renewable energy bond and subsequent green bonds forms a vital part of Nedbank’s commitment to delivering tangible financial support for projects that contribute towards the achievement of the United Nations Sustainable Development Goals.