In what it says is the first sustainability-linked facility the IFC has concluded with a commercial bank in SA.

South Africa’s largest lender by assets, Standard Bank, has signed a $250 million (R4.4 billion) sustainability-linked loan with the International Finance Corporation (IFC) which the bank plans to allocate to its portfolio of green and social assets.

The seven-year loan facility will enable the bank to provide more financial products and services for renewable projects and help provide funding in the affordable housing market.

According to Standard Bank, this is the first sustainable loan the IFC – an investor in private-sector development in underdeveloped countries – has concluded with a commercial bank in South Africa.

“This transaction enables Standard Bank to drive greater positive environmental and social impact in the areas of renewable energy, as well as supporting [the] provision of financing for individuals seeking to acquire homes in the affordable housing segment,” Sasha Cook, sustainable finance head at Standard Bank Group said.

The deal comes as the banking sector seeks to increase sustainability-linked financing and entrenches Standard Bank’s strategic ambitions and commitments to finance renewable energy power plants and social projects in South Africa and across the African continent.

The bank recently reported that its financing of renewable power generation now exceeds that of non-renewable energy power generation by a ratio of 4.9 to one. It said it spent R55 billion last year to finance 29 sustainable transactions, exceeding its goal of R40 billion.

Kenny Fihla, chief executive for corporate and investment banking for the Standard Bank Group, said the conclusion of the sustainable term loan reaffirms the lender’s focus on renewable energy and affordable housing, “which will deliver positive environmental and social impacts in Africa”.

Adamou Labara, IFC country manager for South Africa, echoed Fihla’s sentiments and said increasing access to climate and affordable housing financing will aid the country in achieving sustainable and inclusive economic growth.

“IFC’s partnership with Standard Bank supports the country’s transition to a low-emissions and climate-resilient economy and will expand access to affordable housing and improve the quality of life for South Africans,” Labara said.