Absa teams up with French Development Agency (AFD) to fund clean energy projects.
Absa has signed an agreement with the French Development Agency (AFD) to offer loan finance to the value of €40m to companies with commercially viable clean energy or energy efficient projects. The finance includes a concessional benefit which will be passed on to clients with qualifying projects.
This agreement further illustrates Absa’s continued and committed focus on sustainability and the bank’s endeavour to help in the management of climate change through the provision of funding solutions for both energy efficiency and renewable energy projects.
An example of Absa’s commitment is that over the last year, Absa Capital has provided R8.3bn worth of credit commitments for renewable energy projects.
Addressing the media today, Marcel de Klerk, Absa’s Head of Business Markets, said: “Absa recognises the bank’s responsibility to assist our clients’ efforts through innovative funding methods such as the concessional loan.”
He added: “It is for this reason that Absa has launched this loan facility to promote medium to large energy efficiency and clean production investments, with a minimum of R10 million and a maximum R100 million, specifically within the South African market.”
De Klerk emphasised that Absa has created a dedicated Energy Finance Committee which will consider the eligibility of projects that may qualify for the concessionary benefit.
The focus will be on financing projects that address:
- Retrofitting of existing installations, including on-site co-generation, rehabilitation of boilers, regenerative burners and rehabilitation of power distribution or energy efficiency management systems.
- Commercial energy efficiency in building construction and design. This includes energy efficient heating and ventilation systems, energy-efficient construction materials as well as combined heat and power generation (CHP).
- Renewable energy investments, encompassing power generation for own consumption or for sale to the national grid.
De Klerk stated that through this initiative, Absa will predominantly be focusing on its existing clients who are either entering into energy efficiency and/or renewable energy projects. “In this way, we intend rewarding those clients who embark on significant energy saving projects.”
Along with other energy intensive sectors such as manufacturing and the commercial building space, De Klerk believes that there are also significant energy savings to be realised within 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.”
Absa is also an active participant in the climate change debate and is supportive of government initiatives. The bank is directly engaged with government and through industry associations like the Banking Association of South Africa (BASA) and National Business Initiative (NBI), in support of promoting ‘green’ financing for projects in SA.
Omar Vajeth, Head of Power and Energy at Absa Capital, added that AbCap has a specialised and dedicated power and energy sector focus. A team of experienced sector specialists cover all aspects of energy technologies across sub-Saharan Africa.
“A number of clean energy projects encompassing solar and wind technologies have been financed,” stated Vajeth.
Damien Navizet, Deputy-Director of the AFD in Johannesburg, said that energy efficient investments are too often lagging behind owing to the lack of financing, which has further delayed the development of a local green industry and the creation of “green” jobs.
“It is critical that banks understand both the risks and financial merits of clean energy and energy efficient projects, so that they are willing to create new lines of business to assist owners of such projects. This is just the kind of change which the AFD and Absa are trying to foster with this credit line.”
Ends Notes to the editor: About AFD
The AFD (Agence Française de Développement or French Development Agency) is a publicly owned development bank, operating on behalf of the French Government in over 80 countries worldwide.
Clean energy and energy efficiency are the main pillars of its Climate Change mitigation support strategy, for which it has extended 40% of its financing in the year 2010. In South Africa, the AFD provides financing to both the private and the public sectors to support them in reducing greenhouse gas emissions. For further information contact:
Marketing and Corporate Communications
+27 11 895 6695
+27 79 695 firstname.lastname@example.org