South Africa’s best-performing bank today is making big strides in renewable energy


Nedbank Group aims to nearly double its lending to green energy projects in South Africa over the next two years to strengthen its position as the market leader in financing renewable energy projects.

The bank’s lending to the government’s Renewable Independent Power Producer program – aimed at boosting privately generated electricity in the country – could rise to about R50 billion ($3 billion) from 29 billion in the “short to medium term” edge, said chief executive officer Mike Brown.

“We would certainly be excited to go higher if customer demand is greater than that,” Brown, 56, said in an interview at Nedbank’s office Friday. “We need loads of new energy.”

Demand for financing for renewable energy projects is likely to increase after President Cyril Ramaphosa unleashed the private sector in a bid to end an energy crisis that is holding back Africa’s most industrialized economy.

See also  US bolsters aid to Cambodia amid efforts to alleviate global food crisis

The government removed a 100-megawatt cap on private power generation, allowing unlicensed businesses to produce electricity for their own needs and sell to the grid.

The state also doubled its renewable energy procurement to 5,200 megawatts under the so-called bid window six-tender to help the country accelerate the transition from a reliance on coal for more than 80% of its power, to greener energy sources.

Authorities are rushing to prevent a repeat of the recent power outages – electricity company Eskom Holdings has cut off enough electricity to light 4 million South African homes – which infuriated residents.

See also  5 things you need to know before the stock market opens on Tuesday

Nedbank has been the market leader in previous auctions, says Brown. About 10% of Nedbank’s R1 trillion balance sheet has been advanced to projects that meet the United Nations’ Sustainable Development Goals, he said.

“We firmly believe that working with advising and financing our customers in changing their energy mix and that of the countries in which they operate over the next 10 to 20 years is a huge opportunity for us and one that we absolutely believe in. want to continue to lead in,” said Bruin.

Nedbank is up 24% this year, making it South Africa’s best-performing bank stock. They were up 0.7% on Friday.

See also  Germany is the surprising success story of this energy crisis, not that Labor noticed

Outside South Africa, the lender sees opportunities in the liquefied natural gas discovered in Mozambique, although projects in the region have been delayed due to attacks by an Islamic State branch in the north of the country. The insurgency has resulted in thousands of deaths and displacement of people since the violence began in 2017.

“I’m sure all sponsors will re-evaluate when and how to start over, especially given what’s happening globally,” Brown said. “I think it will make the LNG deposits even more attractive than before, if those security vulnerabilities can be solved.”

Read: The biggest risk to South Africa right now, according to Absa



Please enter your comment!
Please enter your name here