Standard Bank Successfully Arranges IDC’s Sustainable Bond Framework and Inaugural Bond

As arranger and sustainability coordinator, Standard Bank played a key role in structuring IDC’s Sustainable Bond Framework and securing a Second Party Opinion (SPO) from ISS. The framework was developed in accordance with the International Capital Market Association (ICMA) guidelines, including the Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines, and the Climate Transition Finance Handbook.

To ensure compliance with the JSE Debt and Specialist Securities Listings Requirements, IDC appointed ISS to evaluate the framework. The SPO confirmed its credibility, impact, and alignment with global sustainability standards.

"As sustainability coordinator, we collaborated with the IDC to develop their inaugural Sustainable Bond Framework in alignment with the required Principles and guidelines. The use of this Framework ensures that proceeds will be allocated towards projects which drive economic development with positive environmental and social impacts such as renewable energy, energy efficiency, sustainable water and SMME financing” Rochelle Chetty, Senior Manager, Sustainable Finance

The bond auction saw overwhelming investor interest, with total bids reaching R3.464 billion, surpassing the initial R1.5 billion target by 2.3 times. The bonds were issued across 5-, 7-, 10-, and 12-year tenors. The 12-year tenor was a first in South Africa’s ZAR ESG bond market, setting a new benchmark. The 10-year tenor attracted the strongest demand, highlighting investor confidence in IDC. Additionally, IDC successfully compressed its funding curve by 10-15 basis points, compared to its November 2024 auction—demonstrating the value of a well-structured Sustainable Bond Framework.

The inaugural Sustainable Bond Issuance by the IDC marks a milestone in its strategic imperative of raising funding to address the sustainable growth of the South African economy. One of the hallmarks of the transaction is the issuance of a 12- year bond which, from a tenor perspective, is the longest sustainable bond issuance by an SOE in the local debt capital market. The success of the sustainable bond issuance is testament to the IDC’s unflinching commitment to its ESG related initiatives – Katlego Ramatlhare, Senior Transactor, Debt Capital Markets

The funds raised will be directed toward eligible green and social projects, aligned with IDC’s Sustainable Bond Framework, reinforcing its commitment to sustainable development. The sustainable use of proceeds categories includes renewable energy and energy efficiency, sustainable water, clean transport, socio-economic advancement and SMME financing.

As Africa’s largest bank, Standard Bank is committed to unlocking sustainable funding solutions that drive industrialisation, localisation, and economic growth. Partnering with IDC in this landmark issuance reinforces our shared goal of improving the lives of South African citizens through responsible and impactful financing.

Established in 1940, IDC is a state-owned entity mandated to drive job-rich industrialisation and contribute to an inclusive economy. Aligned with national policy, the IDC prioritises funding for black-owned and empowered enterprises, women and youth, while ensuring long-term sustainability through prudent resource management and environmental responsibility. The IDC actively identifies and funds high-impact projects, fosters partnerships and promotes regional economic growth, playing a pivotal role in South Africa's industrial development.