Standard Bank of South Africa (SBK) has unveiled plans to establish a $1 billion fund aimed at accelerating the country’s transition towards renewable energy.
Standard Bank of South Africa (SBK) has unveiled plans to establish a $1 billion fund aimed at accelerating the country’s transition towards renewable energy. Collaborating on this groundbreaking initiative will be Stanlib, the bank’s asset management subsidiary, and Liberty, its property company.
Kenny Fihla, CEO of Standard Bank’s corporate and investment banking unit, revealed that the bank will kickstart the project with an initial investment of $107 million, complemented by an additional $54 million from Liberty. Stanlib will take charge of managing the fund.
Fihla emphasized that this combined funding from SBK and Liberty will provide immediate “scale and diversity” upon its launch into the institutional market. He further stated, “We believe the fund will be well received, as it will offer compelling risk-adjusted and smoothed returns with a predictable income stream.”
In March 2022, Standard Bank introduced its climate policy with a bold ambition to raise up to $16 billion for sustainable energy projects by the close of 2026. Impressively, in the same year, the bank surpassed its target, executing 29 sustainable finance transactions with a total value of $2.9 billion.
The fund’s introduction comes at a pivotal juncture as South Africa strives to diminish its reliance on coal for electricity generation. Coal presently accounts for a substantial 45.6GW of South Africa’s 58.7GW installed capacity, resulting in the emission of 430 million tonnes of carbon dioxide in 2021. This places South Africa as the 14th largest carbon emitter on the global stage.
Standard Bank’s resolute commitment to advancing sustainable energy initiatives underscores a monumental stride towards a greener, more sustainable future for South Africa. The $1 billion fund stands as a testament to the bank’s dedication to propelling the nation towards a renewable energy-driven era.
The transition towards renewable energy is the global shift from fossil fuels to renewable energy sources such as solar, wind, hydroelectric, geothermal, and biomass energy. This transition is essential to mitigate climate change and reduce our reliance on fossil fuels, which are a major source of greenhouse gas emissions.