South African financial institute Standard Bank Group has collaborated with Industrial and Commercial Bank of China (ICBC) to invest SAR20bn ($2.16bn) in the country’s renewable energy infrastructure.
The funds are said to be a part of Renewable Energy Independent Power Producer (IPP) procurement programme to expand the energy sources in South Africa.
Standard Bank Group joint chief executive Ben Kruger noted it as a significant transaction for the company.
"It highlights Standard Bank’s commitment to the renewable energy sector and demonstrates the strength of the partnership between Standard Bank and ICBC, the world’s largest bank," added Kruger.
It has facilitated the funds in alliance with its majority owner ICBC with 20% stake.
ICBC chairman Jiang Jianqing stated: "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.
"In addition, the objective of this partnership is to facilitate the entry of investors into South Africa, and ICBC is excited about the opportunity to co-lend into renewable energy with Standard Bank, ICBC’s South African strategic partner, through to 2025,"
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By GlobalDataICBC expects the group to be a significant partner for the federal government in its infrastructure projects.
Standard Bank said through this collaboration it would provide debt financing on a project finance basis to companies that are awarded preferred bidder status under IPP program.
Earlier in 2012, Standard Bank financed debt funding of SAR9bn ($973.8m) for the first round of IPP. In the second round, it expects to put in SAR6bn ($649.2m).
Standard Bank Group power and infrastructure finance George Kotsovos added: "It represents a further diversification of our sources of funding in addition to domestic asset managers, who are currently keen to invest in such projects.
"The renewable energy programme will require a large funding commitment and the more sources of available capital the better," noted Kotsovos.
