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Nedbank CIB continues to enable green residential property developments

Nedbank CIB continues to enable green residential property developments
20-12-21 / Tau kaVodloza

Nedbank CIB continues to enable green residential property developments

Johannesburg - Nedbank Corporate and Investment Banking (CIB), a division of Nedbank Limited, has once again pushed the boundaries of sustainable finance solutions through debt capital markets - this time by structuring, arranging and launching an innovative first-of-its-kind R1,09 billion green residential development bond instrument - in partnership with the International Finance Corporation (IFC), international blend finance investors and commercial investors.

The R 1,09 billion green bond issuance was launched on 10 December 2021 and listed on the sustainability segment of the JSE.  These proceeds will be directed towards financing some of the bank’s existing and new residential property developer clients engaging in green design and certification of buildings in the low-to-middle-income residential space.

The transaction taps into blend financing channelled by a UK government sponsored programme called the Market Accelerator for Green Construction. This will enable Nedbank to expand its portfolio of Excellence in Design for Greater Efficiencies (EDGE) certified green residential housing developments in South Africa. Nedbank sees this as a growth node for the economy given the continued demand for housing (particularly at the affordable end) after the pandemic, and it will assist in improving the market’s access to green-accredited homes. 

IFC have played the role of anchor investor under the bond and through its’ Advisory Services will provide EDGE tool training and certification support for the bank and prospective developer clients. This will enable Nedbank CIB, through its Property Finance division, to expand its technical advisory services relating to green certifications and particularly with respect to EDGE certification.

Vanessa Murray, Head of Gauteng Lending in Property Finance at Nedbank, says, 'This latest green bond will help in boosting the growth of the green building market in the residential sector, which is very much still in its infancy. Green buildings are key to addressing climate change, resource scarcity and curbing carbon emissions in South Africa. This transaction will enable us to partner with and incentivise our clients to build according to green accreditation standards. It will also enable the delivery of green homes to the end consumer.

This holistic proposition of channelling blend finance and commercial funding from capital market investors to incentivise developers and enable the financing of such projects while building technical skills relating to green residential building design is a prime example of an end-to-end sustainable finance solution.

Arvana Singh, Nedbank CIB’s Head of Sustainable Finance Solutions, says, ‘We are proud of this groundbreaking issuance that aligns with Sustainable Development Goal 9: industry innovation and infrastructure, and we believe that it sets a great example of how the capital markets can be used as a vehicle to unlock blend finance and assist companies to drive sustainability objectives.’

This green bond issuance takes Nedbank’s total issuance of green bonds outstanding on the JSE to a total of R 6,8 billion, making it the largest issuer of green bonds in the South African market to date.

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