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South Africa is set to benefit from the International Finance Corporation’s (IFC) certified green loan in Africa.
- Absa has secured $150 million to provide financing for clean energy and biomass projects in South Africa.
- The IFC will also provide technical advice and knowledge sharing to help Absa develop a framework for green financing.
South Africa is set to benefit from the International Finance Corporation’s (IFC) certified green loan in Africa. The green loan is an initiative of the IFC, and it aims to support countries in their green energy transition. The loan has been granted to Johannesburg-based Absa, a major player in the Southern Africa financial sector. Absa has secured $150 million to provide financing for clean energy and biomass projects in South Africa. According to the IFC, the funds will also support post-Covid-19 recovery in South Africa.
Read also: IFC to Provide $200M for Clean Energy Financing in South Africa
Absa is one of the financing partners in the South African government’s Renewable Energy Independent Power Producer Procurement Programme (REIPPP). The bank has participated in the financial close of 46% of the clean energy projects developed under REIPPP, including the Redstone Concentrated Solar Power (CSP) plant.
According to the IFC, “this loan is the first certified loan in Africa that complies with the green lending principles. This means that Absa’s lending for green projects will be disclosed, which will improve transparency and encourage other banks to follow the principles. In addition to the loan, the IFC will provide technical advice and knowledge sharing to help the bank develop a framework for green, social and sustainable bonds and loans.”
South Africa, whose current capacity comprises about 90 per cent coal generation, aims to reduce its greenhouse gas emissions by 42 per cent by 2025 and cut coal reliance in half by 2050.