IFC And Standard Bank Partner To Support Renewable Energy And Affordable Housing In South Africa

IFC's $300 million sustainable Tier 2 capital loan will allow Standard Bank South Africa, a wholly owned subsidiary of Standard Bank Group, to on-lend and support renewable energy projects and home loans to low-income home buyers in South Africa, 50 percent of which will be used for home loans to women borrowers.

IFC sponsored $260 million of this loan from its own account and mobilized the remaining $40 million from commercial investors.

South Africa, which is currently facing an energy crisis, derives most of its energy from coal which makes up 80 percent of the energy mix.  IFC's financing will play a role in assisting the country to reduce its reliance on coal powered energy. It will also support the increasing demand for affordable housing. South Africa faces a housing deficit of about 3.7 million dwellings, with most of the demand being for low-cost homes driven by low-income earners, according to the Center for Affordable Housing Finance.

Standard Bank is focused, primarily through its sustainable finance division, on providing financial products and services that support positive sustainability outcomes, including green and social loans and bonds, sustainability-linked loans and bonds, sustainable trade and working capital solutions and impact investing.

The funding is aligned with IFC's strategy of promoting climate friendly investments and addressing South Africa's housing shortage through private sector investments.  It builds on IFC's long-term relationship with Standard Bank. In 2020, IFC anchor-invested $200 million in Standard Bank's first offshore green bond to increase access to climate finance, and in 2023 IFC provided a $250 million loan to help Standard Bank scale up its climate finance portfolio.