Absa and AFD to fund clean energy projects in South Africa

0
61

Commercial bank Absa has partnered with French development finance institution Agence Français de Developpmente (AFD) to offer R400-million worth of loan financing to companies with commercially viable clean energy or energy efficient projects.


Absa head of business markets Marcel de Klerk said the agreement illustrated the bank’s focus on sustainability and green financing, as well as its aim to assist South Africa in lowering its carbon emissions and managing climate change.


Absa launched the loan facility to promote medium and large energy efficiency and clean production investments, ranging between R10-million and R100-million.


The focus would specifically be on projects in South Africa; however, the financing could be extended to projects in the rest of Africa at a later stage.


De Klerk said a dedicated Energy Finance Committee had been created that would consider the eligibility of projects for which funding was sought.


Projects would be awarded funding, provided they addressed specifically outlined factors. These include retrofitting of existing installations, including on-site cogeneration, rehabilitation of boilers, regenerative burners and rehabilitation of power distribution or energy efficiency management systems.


Those projects that aim to undertake commercial energy efficient building construction and design, such as energy efficient heating and ventilation systems, construction materials, as well as combined heat and power generation, would also be considered.


Further, renewable energy investments, including power generation for own consumption or for sale to the national grid also formed part of the criteria.


De Klerk pointed out that although Absa would initially focus on its existing clients which were active in the energy-intensive manufacturing and commercial building spheres and which were entering energy efficient or renewable energy projects, there also existed significant energy saving potential in the agriculture sector.


“Energy efficiency in agriculture can result in managing increasing costs and a reduction or elimination of greenhouse-gas emissions through changes in the methods of some farming activities,” he said.


The finance includes a single-digit percentage concessional benefit that would be passed on to clients with qualifying projects.


Absa was currently the key financier of renewable energy projects in South Africa, underwriting about R10.1-million in projects that formed part of the Department of Energy’s independent power producer (IPP) procurement programme, said head of power and energy at Absa Capital Omar Vijef.


“We actively support the IPP, wherein the government will procure about 3 725 MW of renewable energy. This represents a significant opportunity for banks and developers to get involved in the South African green energy industry,” he noted.


AFD in Johannesburg deputy director Damien Navizet said energy efficient investment too often lags behind owing to the lack of financing, which has further delayed the development of a local green industry and the creation of jobs in this regard.


“Banks must understand the risks and financial merits of clean energy and energy efficient projects and create new lines of business to assist owners of such projects,” Navizet stated.

Source….

Follow @SAAEA

Enhanced by Zemanta

Comments

comments