Nedbank Corporate and Investment Banking (Nedbank CIB) has successfully issued a R2 billion sustainability tier II bond for the Nedbank Group, which debuted on the JSE’s sustainability segment on 7 November 2024.
This bond attracted demand that was double the available supply and aims to tackle critical social and environmental issues in South Africa.
The raised funds will be directed towards three key focus areas:
- Affordable housing – This initiative is designed to provide mortgages for low-income women, enhancing female homeownership and increasing accessibility to housing, thus addressing the historically low rates of female property ownership in South Africa.
- Water infrastructure – Focused on improving access to safe drinking water and enhancing sanitation through sustainable water management initiatives. This is crucial for providing decent sanitation facilities and improving the quality and efficiency of the water supply available.
- Climate-smart agriculture – Supporting projects that promote sustainable agricultural practices, which ultimately bolster productivity and water efficiency for local farmers. Solutions include water conservation techniques, improvements to soil health, advanced irrigation systems, and protective shade netting for crops during unfavorable weather conditions.
These focal areas were identified through extensive internal collaboration, leveraging insights from Nedbank’s Tabono Women Advancement Programme, which helps empower women with essential skills for career advancement within the organization. This strategy aligns with Nedbank’s Sustainable Finance Fundraising Framework and its commitment to sustainable development.
Nedbank distinguishes itself as the only South African bank to issue a sustainability tier II bond that combines this unique mix of use-of-proceeds categories, which include both green and social impact elements, extending beyond the conventional categories of renewable energy, affordable housing, and green buildings.
Impact
The impact of the bond will be quantitatively assessed and reported annually for its duration, with comprehensive reports detailing the number of mortgages granted to women, the volume of water supplied or conserved each year, and the productivity or water savings achieved from climate-smart agriculture initiatives.
This transaction was supported by a pre-issuance second-party opinion from S&P Global.
Nedbank will provide annual compliance verifications to the JSE post-issuance, ensuring ongoing alignment with the Sustainable Bond Principles established by the International Capital Markets Association.
Johan Malan, principal of Sustainable Finance Solutions at Nedbank CIB. Image: Supplied
Nedbank is dedicated to its mission of utilizing financial expertise to benefit clients and society at large.
We recognize that one of the most effective ways to accomplish this is by channeling financing into initiatives that produce positive environmental and social impacts, thereby contributing to key Sustainable Development Goal targets within our local context.
Integrating sustainable finance solutions is essential to our business model.
The bond was structured by the Nedbank CIB Sustainable Finance Solutions team, with vital contributions from the Debt Capital Markets, Syndication, and Distribution teams.
The successful execution of this transaction underscores the collaborative efforts within Nedbank, including partnerships across teams in Public Sector, Construction, Agriculture in Investment Banking, and the Home Loans team in Retail and Business Banking.
Johan Malan is the principal of Sustainable Finance Solutions at Nedbank CIB.
Brought to you by Nedbank Corporate and Investment Banking (CIB).
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