Bank signs landmark R20-billion finance deal

May 7th, 2013, Published in Articles: Energize

Standard Bank has signed a R20-billion funding support agreement for renewable energy projects in South Africa with the Industrial and Commercial Bank of China (ICBC). The deal is structured to provide the funding out of rand money accruing to ICBC by virtue of their shareholding. The agreement was signed by ICBC Chairman Jiang Jianqing and Standard Bank Group Joint Chief Executive Ben Kruger. Kruger said that this transaction is extremely significant as it highlights the local bank’s commitment to the renewable energy sector and demonstrates the strength of the partnership between it and ICBC, the world’s largest bank. Jiang stated that 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. 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 their South African strategic partner, through to 2025. George Kotsovos, head of power and infrastructure finance said that the two banks will jointly provide debt financing on a project finance basis to companies that are awarded preferred bidder status under the country’s REIPPP. In the first round that were finalised last year, the bank financed over R9-billion of debt funding, and in the second round it expects to fund R6-billion. Kotsovos said that the imminent third round will illicit further significant interest from developers and liquidity may become an issue. ICBC’s involvement will help to reduce the pressure as the bank’s domestic asset managers are keen to invest in such projects.

Contact Erik Larsen, Standard Bank, Tel 011 636-7529, erik.larsen@standardbank.co.za

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