• The Standard Bank Group has secured a $300 million loan from the International Finance Corporation.
• The loan will be allocated to a portfolio of green and social assets for South Africa and other African nations.
• This loan has been granted less than a year after the IFC granted Standard Bank SA a $250 million loan for renewable energy assets and affordable housing projects.

On Tuesday morning Standard Bank Group announced that it had closed a $300 million sustainable Tier 2 capital loan. The loan comes from the World Bank’s International Finance Corporation (IFC) and is structured as a 10.5 year loan.

The funds from this loan will reportedly be allocated to a portfolio of “green and social assets”. According to a press release, this means renewable energy and affordable housing for South Africans and the rest of the continent.

“The successful conclusion of this USD 300 million sustainable loan provides financial resources to enable the Bank to continue supporting our customers on their Social and Environmental journeys. We are delighted to partner with the IFC and drive positive impact across the continent,” chief executive for corporate and investment banking at Standard Bank Group said in a statement.

According to an IFC disclosure, $260 million of this loan comes from its own coffers while the remaining $40 million was “mobilized from IFC B loan participants”.

Of course, part of the money will be used to construct power plants that employ renewable energy sources. Standard Bank’s sustainable finance division is focused on providing financial products and services that support sustainable initiatives.

This is just the latest loan Standard Bank has received from the IFC. Back in July 2023 the bank received $250 million from the IFC in the form of a sustainability loan. Importantly, that loan was specifically to Standard Bank of South Africa and not the wider Standard Bank Group as this latest loan is intended for.

However, the loans are for similar goals with the main difference being Standard Bank SA’s loan runs over seven years and will be used to finance the bank’s renewable energy assets. Like this latest loan, the money from 2023 will also be used to support Standard Bank SA’s housing finance program.

“The proposed IFC investment entails a senior loan of up to US$250 million with a 7-year bullet tenor comprised of (i) an A Loan of up to approximately US$228.6 million; and (ii) a Trust Loan of up to approximately US$21.4 million under the Managed Co-Lending Portfolio Program (“MCPP”) One Planet (the “Project”). The Project will finance a portion of SBSA’s renewable energy assets and support SBSA’s housing finance program to the affordable housing segment, of which 50 percent will be used for home loans to women borrowers, on a best-efforts basis,” the IFC wrote in 2023.

As South Africa moves to address the energy crisis while still being mindful of our emissions and environmental impact, funds such as these will help the continent move toward a more sustainable future.