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IFC invests R1bn in Growthpoint’s green bond

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The International Finance Corporation (IFC) will invest R1 billion ($54 million) in a green bond established by Growthpoint – South Africa’s largest listed property group.

Announcing the deal earlier this week, Growthpoint and the IFC said the new funds will finance energy and water improvements across Growthpoint’s office, industrial and retail spaces across South Africa.

The improvements are anticipated to reduce carbon emissions from the company’s portfolio by over 18 000 tons annually, according to a joint statement.

Listen/Read: IFC on green bonds, sustainability and SME funding in SA

In addition, the bond “will help Growthpoint” refinance its green office building located at 144 Oxford in Rosebank, Johannesburg.

“Increased funding for green buildings is vital in South Africa, which is facing increasing power and water shortages. Furthermore, access to green funding remains limited in the country,” the IFC and Growthpoint said.

Growthpoint’s group financial director Gerald Völkel said the group is committed to creating a space to thrive in with “innovate and sustainable property solutions in environmentally friendly buildings while improving the social and material wellbeing of individuals and communities”.

ESG goals

He pointed out that the green bond supports the company’s ESG (environmental, social, and governance) strategy and renewable energy goals and furthers the diversification of its funding.

“IFC is committed to accelerating access to green and sustainable buildings in South Africa to address climate change, protect the environment and support economic activity,” said Adamou Labara, IFC’s country manager for South Africa.

Labara noted that the green bond investment will contribute towards a greater climate change resilience in the country by supporting climate-smart infrastructure and reduce the private sector’s carbon footprint.

Growthpoint added that the green bond aligns with its sustainability strategy, which has a one of its goals to certify its entire building portfolio as carbon neutral by 2050.

Read:
Growthpoint corporate office portfolio aims for net-zero carbon status by 2030
Growthpoint: Office market will never be the same due to Covid-19
Growthpoint partners with Investec, IFC on Africa real estate
Rosebank is SA’s priciest office node, report shows

The property giant said the strategy includes reducing greenhouse gas emissions by 25% and increasing its renewable energy use by more than 5 times by 2026.

“The green bond R1 billion issuance was issued under Growthpoint’s existing domestic medium-term note [DMTN] programme, which is registered at the Johannesburg Stock Exchange,” the company noted.

“It aligns with IFC’s strategy to green the commercial sector in South Africa by further developing capital markets, promoting climate-smart investments, and crowding in climate-relevant private capital.”

The group said that Absa Corporate and Investment Banking (CIB) acted as bond advisors for the transaction and assisted Growthpoint with the private placement of the bond on the JSE.

Nondumiso Lehutso is a Moneyweb intern.

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