Does Standard Bank’s clean energy funding outweigh its controversial dirty energy deal facilitation?
Lungisa Fuzile, Standard Bank South Africa’s chief executive, maintains that the bank has a strong commitment to renewable energy, financing R5 in renewable energy for every R1 lent to non-renewable power in 2022.
At least one bank is making a dent in South Africa’s R1-trillion renewable energy funding opportunity, although it remains a lead financial arranger for the controversial East African Crude Oil Pipeline.
Shareholder activist group Just Share says the pipeline will pump enough oil to send up to 34.3mt of carbon dioxide – about seven times the emissions of Uganda and Tanzania combined – into the atmosphere each year.
At a media briefing on Tuesday, Standard Bank South Africa claimed it was one of the largest investors in green energy, anticipating a total book size of more than R3-billion in solar installation finance by the end of this year.
The R3bn figure includes money that will be disbursed as part of the government’s energy bounce-back loan scheme which went live on Standard Bank’s books on 20 September.
Lungisa Fuzile, Standard Bank South Africa’s chief executive, says although it’s still early days, about R1-million has already been disbursed via the bounce-back loan scheme.
“There is increasing interest as more people come to know about it, because currently, most are using personal loans or equity in their home loans to finance their solar installations,” he says.
The bank says it expects to fund another R300-million towards consumer solar installations in the fourth quarter of this year alone.
Through its LookSee home efficiency digital platform, Standard Bank has installed over R600-million worth of home solar systems comprising more than 3,700 solar panels, with estimated annual savings of almost R14-million being achieved by said customers.
Fuzile says: “Standard Bank aims to achieve net-zero carbon emissions from its operations by 2040 and from its portfolio of financed emissions by 2050, aligning with the Paris Agreement.
“In the first half of 2023, Standard Bank mobilised R28-billion for sustainable finance, bringing the cumulative amount since the 2022 financial year to R83-billion.”
Fuzile maintains that the bank has a strong commitment to renewable energy, financing R5 in renewable energy for every R1 lent to non-renewable power in 2022.
The bank also provided R30-billion in financing for new renewable energy power plants.
While all this may be true, and Standard Bank’s commitment to renewable energy projects is notable, the reality remains that the bank came in for criticism recently for its funding of fossil fuel projects.
According to shareholder activist organisation Just Share’s briefing on Standard Bank Group’s climate disclosures from 2022, Standard Bank’s exposure to coal mining, oil, gas and power generation from fossil fuels increased by 22% from 2021 to 2022, with total exposure at R119.4-billion, compared with R97.6-billion the previous year.
Sustainable finance transactions
Over the last year, Standard Bank executed 29 sustainable finance transactions with a total value of R55-billion as the bank ramped up its origination efforts to support clients in achieving their climate and sustainability goals.
Standard Bank also funded and committed under REIPPP and RMIPPP R52.5-billion or 3GW, while three projects have not yet reached financial close. DM