SOUTH African financial services concern, Nedbank Group, has set aside more than US$3,92 billion for renewable energy lending as sustainable development and energy financing becomes key to the group’s strategy, an executive has said.
This comes as the drive towards clean energy is gathering momentum the world over as financial institutions re-angle their investments towards climate change projects.
As a result, renewable-energy projects are seen providing some foundation for growth in corporate loans in the long term.
Nedbank Group CEO Mike Brown, who was in Zimbabwe recently to meet the banks’ key stakeholders, said Nedbank was expecting to be the leading renewable energy financiers in the countries it operates in, including Zimbabwe.
He said the bank was the leading financier of renewable energy programmes in South Africa and that support in other markets it operates in would help in the long-term transition from carbon fuels to green energy.
“Well, so, you know, we don’t have a particular amount, but currently we've got about ZAR28 billion (US$1,46 billion) of funding that we've put towards government renewable energy programs. We have a pipeline of about another ZAR10 billion (US$522,72 million) in that environment,” Brown said.
“And we have a commercial industrial pipeline of about ZAR13 billion (US$679,53 million). So very quickly, you are going to get to somewhere between ZAR50 billion (US$2,61 billion) and ZAR75 billion (US$3,92 billion) of investment behind renewable clean energy.”
Brown said the group was increasing support towards its large corporate and mining clients in commercial industrial energy generation.
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“Certainly, sustainable development finance in general and energy finance in particular is an absolutely key part of Nedbanks strategy,” he said.
“And as I said earlier, Nedbank is the leading financier of renewable energy programmes in South Africa, either government’s own renewable energy programmes or increasingly commercial industrial energy generation of our large corporate clients and mining clients in particular.”
The banker expected the trend to play out in many other African countries in support of a long-term just transition in the climate agenda.
It its financials for the half year ended June 30, 2023, the group said despite the challenging macro-economic outlook, it saw significant opportunities in working with its clients to meet their energy and infrastructure needs in the second half of the year.
While delays in renewable energy projects deferred business flows and revenue into the second half of the year, renewable energy and infrastructure finance remained a key focus area for the group.
This agenda also includes thought leadership, innovative product development and engagement with clients and government on strategic projects to collaboratively address challenges and unlock economic growth.
The Nedbank Group is one of the five largest financial services groups in Africa with over US$67 billion worth of assets.