Nedbank Corporate and Investment Banking (Nedbank CIB) has concluded a R2 billion sustainability tier II bond for the Nedbank Group. It was listed on the sustainability segment of the JSE on 7 November 2024.
The bond, which was oversubscribed twice over, will focus critical social and environmental issues in South Africa.
The proceeds will be directed towards three high-priority areas:
- Affordable housing – Targeting mortgages for low-income female borrowers, thereby supporting increased female homeownership and housing accessibility. This initiative is seen as crucial given the historically lower rates of female homeownership in South Africa.
- Water infrastructure – Expanding the supply of safe drinking water and improved sanitation through sustainable water management projects. This is vital for enhancing access to safe and affordable drinking water and adequate sanitation facilities, as well as improving water quality and efficiency.
- Climate-smart agriculture – Financing initiatives that promote sustainable agricultural practices, enhancing productivity and/or water efficiency for local farmers. These solutions include water conservation, improvements to soil health, advanced irrigation techniques, and shade netting to protect crops during adverse weather events.
These focus areas were identified through rigorous internal collaboration, including valuable input from Nedbank’s Tabono Women Advancement Programme (which assists women with core competencies to advance within the business), and by aligning with Nedbank’s Sustainable Finance Fundraising Framework and its sustainable development commitments.
Nedbank is the only South African bank to issue a sustainability tier II bond with this unique combination of use-of-proceeds categories, combining green and social impact categories beyond the usual combination of renewable energy, affordable housing and green buildings.
Impact
The impact of the bond will be measured and annually reported on over its lifetime, with this reporting detailing the number of mortgages issued to women, the capacity of water supplied or saved annually, and the water-saving and/or productivity gains achieved by climate-smart agriculture projects.
The transaction falls under a pre-issuance second-party opinion obtained from S&P Global.
Nedbank will provide annual post-issuance compliance verification to the JSE, confirming ongoing adherence to the Sustainable Bond Principles of the International Capital Markets Association.
Nedbank continues to live out its purpose of using its financial expertise to do good for its clients and society.
We recognise that one of the most effective ways of doing this is by focusing on financing activities that deliver positive environmental and social outcomes that help address relevant Sustainable Development Goal targets in our local context.
Embedding sustainable finance solutions remains at the core of our business model.
The bond was structured by the Nedbank CIB Sustainable Finance Solutions team, with support from the Debt Capital Markets and Syndication and Distribution teams.
The success of the transaction is the result of teamwork across Nedbank, including collaboration with the Public Sector and Construction and Agricultural teams in Investment Banking, as well as the Home Loans team in Retail and Business Banking. – bbc.com
