Standard Bank wants to mobilise R300 billion in sustainable financing by the end of 2026, aiming to capture a significant portion of the proceeds from South Africa’s and Africa’s energy transition.
This was revealed in a media roundtable hosted by Standard Bank South Africa this week, where the company outlined its plans to meet its target of having a net zero portfolio by 2050.
Demand has increased exponentially since the government lifted the cap on private generation projects at the beginning of the year.
Standard Bank’s financing of renewable projects has risen with demand to over four times greater than the bank’s funding of non-renewable energy projects.
The bank set an initial target of financing R55 billion worth of renewable energy projects in Africa within two years from 2021. This target was reached in less than one year.
Standard Bank South Africa CEO Lungisa Fuzile said the bank has set more ambitious targets for the next few years, with a total of R300 billion in sustainable financing solutions mobilised by 2026.
This is not limited to loans and advances, with the bank also looking to expand its underwriting portfolio and arranging activities in South Africa undertaken on behalf of clients.
Based on the bank’s Climate Policy, published last year, there are clear short-, medium -, and long-term goals.
As part of the R300 billion in sustainable financing solutions, Standard Bank aims to finance R50 billion worth of renewable energy power plants and underwrite R15 billion in renewable energy commitments by 2024.
Most projects are in South Africa, with the bank starting to see demand pick up in Namibia, Kenya, and Nigeria.
In South Africa, the mining sector is the major player in building large renewable projects to mitigate the effects of load-shedding and diversify their energy streams away from fossil fuels.
So far, Standard Bank has mobilised R28 billion in the first half of 2023, with over R55 billion financed in 2022.
R30 billion over 2022 and 2023 has gone directly into new renewable energy power plants.
Standard Bank’s head of corporate and investment banking, Zaid Moola, said that on any given day, projects funded by the bank contribute 4,000 MW to the grid.
The bank is funding 1,000 MW worth of renewable energy projects to come online this year, with a further 3,000 MW in the pipeline for the next 18 months.