South African bank to launch US$1bn green energy fund

Standard Bank of South Africa (SBK) plans to create a US$1 billion fund to support South Africa’s shift towards renewable energy.

The fund is said to invest in a pool of energy transition and project loans, such as renewable energy and related clean technologies (Photo: AdobeStock)

SBK says they will work on the project alongside Stanlib, its asset management subsidiary, and Liberty, its property company.

SBK and Liberty will provide an initial seed investment of US$162.9 million (ZAR3 billion) to the Fund, which will be managed by Stanlib. The main objective is to create easier access to investments with the ultimate goal of creating a pan-African investment vehicle worth US$1 billion (ZAR20 billion).

It is reported that the fund will invest in a pool of energy transition and project loans, such as renewable energy and related clean technologies, to enable Africa to fulfil its energy transition goals at scale.

Kenny Fihla, cheif executive of Standard Bank’s Corporate and Investment Banking unit, announced a US$107 million investment while Liberty provided an additional US$54 million, with Stanlib managing the fund.

“We believe the Fund will be well received, as it will offer compelling risk-adjusted and smoothed returns with a predictable income stream,” said Kenny Fihla, CEO of Corporate and Investment Banking at Standard Bank of South Africa.

Standard Bank launched its climate policy in March 2022, with a target of raising up to US$16 billion for sustainable energy projects by the end of 2026.

Last year, the bank said it exceeded its goal by executing a total of 29 sustainable finance transactions with a total value of US$2.9 billion.