- AFD is launching a $100 million loan to FirstRand for climate change mitigation and adaptation.
- FirstRand will finance private sector projects renewable energy, energy efficiency and agriculture.
The French Development Agency (AFD) is set to provide a $100 million loan to FirstRand Bank to finance climate change mitigation and adaptation projects. Both organisations signed a memorandum of understanding for the $100 million loans. The funding will cover affordable housing projects, renewable energy, energy efficiency and agriculture. The AFD believes that the loan will help South Africa to meet its Nationally Determined Contribution (NDC). It will also strengthen the role the private sector plays in South Africa’s low-carbon transition.
As part of the financing, there will also be a technical assistance facility to enhance FirstRand’s climate finance capacity and support the programme’s implementation. Andries du Toit, Group Treasurer of FirstRand, stated that “this credit facility and accompanying technical assistance will allow us to accelerate our strategy to broaden and deepen our client offering in the SME (small and medium enterprise) and agriculture segments while supporting our own and our clients’ climate change ambitions in an effective and efficient manner.”
This financing is part of the AFD’s ‘Transforming Financial Systems for Climate (TFSC)’ program. The programme being implemented alongside the Green Climate Fund (GCF) is a $750 million facility launched in 2018 and aims to support local financial institutions in scaling up climate impact finance in 17 countries, mainly in Africa.