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Three leading South African banks are launching a new fund dedicated to energy transition in the country. This new initiative will raise $1 billion over the next few years to finance the transition to clean energy. The energy transition is underway in South Africa, with the support of local investors.
Three leading South African banks are launching a new fund dedicated to energy transition in the country. This new initiative will raise $1 billion over the next few years to finance the transition to clean energy. The energy transition is underway in South Africa, with the support of local investors. This commitment has been made by Standard Bank, which offers its services in 38 countries, including 18 in Africa, as well as by the financial services group Liberty and its subsidiary, the asset manager Stanlib. The three partners expect to raise USD1 billion over the next few years. Initially, Standard Bank and Liberty will provide seed capital of USD 158 million. Stanlib will manage the new fund, the long-term objective is to facilitate access to the asset class to raise capital from institutional investors.
These include development finance institutions (DFIs), banks, pension funds and others. The fund will invest in a pipeline of energy transition and project loans of different maturities and in different technologies, such as renewable energy and related clean technologies, to enable Africa to achieve its large-scale energy transition goals.
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The fund is being launched at a time when South Africa is seeking to reduce its dependence on coal for electricity generation. Currently, the southern African country is 80% dependent on this fossil fuel. This is compounded by load shedding caused by the dilapidated state-owned thermal power stations operated by Eskom. This initiative will address a range of UN Sustainable Development Goals, including climate action, affordable and clean energy, sustainable cities and communities, and industrial innovation and infrastructure.
