Standard Bank and the ICBC to fund renewable energy projects
Standard Bank and the Industrial and Commercial Bank of China (ICBC) have signed a R20 billion ($2 billion) agreement to fund renewable energy projects in South Africa, it was announced on Tuesday. Standard Bank is Africa’s biggest bank by assets and ICBC is a majority shareholder in Standard Bank with 20 percent stake in the Johannesburg-based lender.
According to Standard Bank, the transaction is aimed at providing funding out of rand money accruing to ICBC by virtue of that 20 percent shareholding in the bank. Ben Kruger, the joint Standard Bank CEO, said the transaction was extremely important as it highlighted the bank’s commitment to the renewable energy sector.
“It demonstrates the strength of the partnership between Standard Bank and ICBC, the world’s largest bank,” Kruger said in a statement.
“ICBC’s aim is to promote the use of renewable energy in South Africa in support of the South African government’s renewable energy programme, and through this partnership, to help save the environment.”
The two lenders will jointly supply debt financing to firms that are granted preferred bidder status under the country’s Renewable Energy Independent Power Producer (IPP) Procurement Programme.
This will relate to programmes where Standard Bank is or will be assigned as a lead arranger of the transactions.
In the first round of renewable IPPs that were finalised last year, Standard Bank financed over R9 billion of debt funding, and in the second round it expects to fund R6 billion ($651 million).