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Wealth and Investment

Standard Bank’s $100 million sustainability-linked financing towards growing Africa’s infrastructure

24 Jan 2024

Country
South Africa
Year
2024
Sector
Energy and Infrastructure
Business Unit
Investment Banking
Specific Role
Sole Lender and sustainability co-ordinator
Standard Bank is excited to announce its efforts towards sustainability-linked financing have been bolstered as we have signed off a $75 million multicurrency revolving credit facility and a $25 million sustainability-linked term debt facility for the Private Infrastructure Development Group (PIDG) company Emerging Africa Infrastructure Fund (EAIF)

The credit and debt facilities, a 3-year, $75 million multicurrency revolving credit facility provided in USD and EUR and a 7-year, $25 million term facility, show the bank’s appetite to inject much-capital into a key sector. This also represents the bank’s first lending to a private credit fund of this size.

Additionally, it re-enforces our commitment towards innovation in order to meet the needs of our clients by providing a multi-currency revolving credit facility.

This is part of a new round of multi-party investments in EAIF, involving key stakeholders such as one of the leading insurers and financial groups in the world, Allianz Group. Allianz Global Investors led the financing on behalf of Allianz Group, who provided EAIF with approximately $130 million in new debt financing to advance infrastructure development across Africa, with EAIF over the last 20 years having helped pave the way to grow and drive the continent’s infrastructure sector.

EAIF has successfully raised $230 million of additional debt facilities, supporting its goal to raise $500 million by 2025. These efforts are backed by reputable finance institutions such as Standard Bank, which aligns with EAIF’s mission to foster infrastructure development across Africa. This transaction is testament to that, as it provides additional funding to EAIF, allowing it to continue its work of developing much-needed infrastructure across sectors such as transport, energy, health, and water and sanitation.

EAIF has completed 96 projects and mobilised a total investment commitment of over $2.1 billion across 20 African countries in 9 different infrastructure sectors.

EAIF’s parent, PIDG, has impressive figures too. Since 2002, PIDG has successfully facilitated 211 infrastructure projects, which has provided an estimated 222 million people with improved or new infrastructure access. They are supported by 6 governments: the United Kingdom, Netherlands, Switzerland, Australia, Sweden and Germany.

Rentia van Tonder, Executive Vice President of Power, Standard Bank said: “Ninety One, EAIF and Standard Bank have a shared focus, and Standard Bank Group’s continued support for Ninety One is based on a longstanding, multi relationship between the Group and subsidiaries where we service mutual clients and are each other’s clients for various products and services across the African continent. Both firms continue enhancing value for our respective businesses, our clients and for society at large.”

EAIF recently received a boost from Moody’s, who reaffirmed their foreign currency long-term rating of A2 with a stable outlook. This highlights EAIF’s strong capital position and proven track record in the continent.

As Africa’s largest lender by assets, Standard Bank is focused on sustainable growth and progress in the continent by structuring both facilities as sustainability-linked loans. The sustainable aspect of the funding will help propel Africa towards its journey to a clean energy transition. This is a crucial point as the deal was collaborative.

The multicurrency aspect of the transaction, specifically being able to lend in both USD and EUR, was leveraged through the Standard Bank Group’s balance sheet. This includes Standard Bank Isle of Man and Standard Bank Mauritius collaborating with Standard Bank South Africa to close the transaction.

Finally, the length of the term facility demonstrates our commitment to the client and the continent. Neha Bantha, Executive at Standard Bank Leveraged Finance said, “Providing this facility is in line with Standard Bank’s strategic objective to deliver structured capital solutions alongside our client’s strategy of sustainability and development of the African continent."

"This sustainability-linked loan for EAIF reaffirms our commitment to the sustainable economic development of Africa and aligns with Standard Bank and EAIF’s purpose. Our footprint and expertise across the continent confirm that we understand Africa’s development to be intricately tied to the advancement of its infrastructure, and it is evidence of the Group’s ability to leverage off the broader group balance sheets and on the ground presence.”  

She concluded, “Through our partnerships, we ensure innovative solutions that not only provide value for clients but also transform Africa’s economy.”