Nedbank launches R2,1 billion Green Private Power Tier 2 Bond − fuelling private sector renewable energy growth in South Africa

Nedbank, a pioneer in sustainable finance solutions, has announced the successful conclusion of a R2,1 billion Green Private Power Tier 2 Bond, which listed on the sustainability segment of the Johannesburg Stock Exchange (JSE) on Tuesday, 3 October 2023.

The new green bond proceeds will focus on notionally funding private renewable energy projects in South Africa and marks a significant milestone in Nedbank’s ongoing commitment to promoting renewable energy in the country.

Private renewable energy power projects refer to commercial and utility-scale renewable energy projects with private corporate off-takers. These projects will play a pivotal role in advancing renewable energy capacity, will accelerate the transition to a low-carbon economy, and lend support to the underlying corporates’ own sustainability objectives.

Acting through its Corporate and Investment Banking Division, Nedbank structured and arranged the innovative landmark R2,1 billion Tier 2 green bond, which was met with strong response from investors in the oversubscribed auction process, showing market support for Nedbank’s continuous dedication to sustainability and its pivotal role in financing the transition to clean energy.

The bond marks the first bond issue under Nedbank’s recently updated Sustainable Finance Use of Proceeds Fundraising Framework, published in August 2023, and its seventh green bond issuance overall since it became the first South African bank to issue green bonds in 2019. The updated framework is supported by a Second-party Opinion issued by Standard & Poor’s Financial Services LLC, who is a recognised global ratings and second-party opinion provider. The bond aligns with the International Capital Market Association Green Bond Principals and has been listed on the Sustainability Segment of the JSE.

‘As a result of the continued decline in the cost of renewable energy, engaging in this technology gives South African corporates the opportunity to leverage their balance sheets to procure cheap and clean power and support South Africa’s energy transition,’ says Peter van Kerckhoven, co-head of the Debt Finance business at Nedbank Investment Banking.

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Speaking on this achievement, Arvana Singh, Head of Sustainable Finance Solutions at Nedbank Investment Banking, noted that the successful conclusion of the Nedbank Green Private Power Tier 2 Bond is testament to the bank’s unwavering and continuous commitment to sustainable finance and renewable energy growth in the country. ‘We remain dedicated to driving innovation and sustainability and having a positive impact through our financial expertise, and we are grateful for the trust and support of our investors, partners and stakeholders in this regard.’