The bank wants to end oil-related investments while strengthening its climate policy.
Standard Bank will spend R250 billion (US$17 billion) on green finance. These investments will be made between now and 2026 and will enable the Johannesburg-based group to support renewable energy development projects in South Africa and eventually throughout the African continent.
Standard Bank has decided to restrict its investments in the production and use of fossil fuels. For example, it will invest in gas projects when replacing fuel oil in thermal power stations or supporting power stations that are partially powered by renewable energy.
Founded in 1862 by British entrepreneur John Paterson, South Africa’s Standard Bank Group is 20.1% owned by the Industrial and Commercial Bank of China (ICBC) and 11.9% by the Public Investment Corporation (PIC), a pension fund manager.
“For customers that generate electricity from coal, financing is expected to fall from 0.18% of the bank’s total commitments in 2021, to 0.15% in 2026 and 0.12% in 2030. New coal mining projects will only be financed if the overall environmental impact is positive,” said the bank, headed by Sim Tshabalala.
The bonds were underwritten by the International Finance Corporation (IFC), the private sector financing arm of the World Bank Group. The proceeds of these bonds are already being used to finance renewable energy projects, energy efficiency and green building construction.
In last year, Absa Bank secured a US$150 million loan from IFC to support the bank’s strategy to expand its climate finance business and help South Africa meet its greenhouse gas reduction targets.