Awards for Excellence 2018
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On the back of the worst drought in living memory, the City of Cape Town issued South Africa’s first true green bond last year. It turned to one bank to be the lead arranger – Rand Merchant Bank (RMB). The city was able to raise R1 billion ($73 million) from eight allocated bidders, having received bids of almost R5 billion from 31 different bidders. The proceeds will be put to use financing green projects such as emergency water supply initiatives.
FirstRand Bank, RMB’s parent, has a deep commitment to society and the environment, earning it the award for Africa’s best bank for sustainable finance.
Last year, the bank reviewed and updated its environmental and social risk management (ESRM) policy, offering continued training and refresher courses for employees and increasing levels of due diligence for certain transactions. Its thorough ESRM process has been rolled out to nearly all of FirstRand’s business and subsidiaries, including RMB.
Among those companies it will not finance are those with unsustainable fishing practices, for example, and it has a strong focus on not financing companies that have a detrimental impact on water quality and use. Given South Africa’s dependence on coal, as yet FirstRand has not excluded the funding of coal-fired power stations, but through RMB it has financed independent renewable energy power producers to the value of over R50 billion since 2011 and finances customers for own-use solar power infrastructure.
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| Alan Pullinger |
Last year, RMB and KfW Development Bank also closed the Facility for Investment in Renewable Small Transactions, which was structured to enable the funding of small renewable energy projects. The fund was originally established to support the Small Projects Independent Power Producers programme, a renewable energy programme led by the department of energy in South Africa and aimed at small and medium-sized enterprises and new entrants to the renewable energy sector.
FirstRand, under CEO Allan Pullinger, is also engaged in microfinance and last year the IFC selected FirstRand in its push to finance SMEs in South Africa, lending the bank up to R2.6 billion, which the bank is on-lending to SMEs.
