Project detail - FIRSTRAND BANK LIMITED

FIRSTRAND BANK LIMITED

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Who is our client

FirstRand Bank is a Tier 1 financial institution in South Africa. It is #2 by total assets and with 22% total market share as of December 2019. The bank had total assets of US$92 billion, net loans of US$63 billion, customer deposits of US$59 billion and equity of US$7.4 billion at December 2019. FirstRand Bank is 100% owned by FirstRand Limited (“the group”), a financial services company listed on the Johannesburg Stock Exchange (JSE) and Namibian Stock Exchange (NSX). The group employs approximately 49,867 people across ten countries throughout sub-Saharan Africa and FirstRand Bank has branches in London, India, and Guernsey.

Funding objective

The Project is a dedicated green loan with all proceeds used to expand FirstRand Bank’s climate finance portfolio in South Africa. The Project will provide additional support to the bank’s strategy to fund renewable energy and energy efficiency projects in corporates and smaller businesses. It also facilitates the bank’s shifting focus in its climate portfolio, from mitigation to resilience, through the financing of “climate smart infrastructure”, agriculture and manufacturing.

Why we fund this project

FMO is funding this Project as it will help increase access to climate finance. It also has the potential to catalyze the sustainable development of South Africa's climate finance market through demonstrating the viability of capital allocation to climate projects, which in turn will raise awareness in the broader financial institutions sector. This should result in reforms and capacity building for a more sustainable banking sector.

Environmental and social rationale

First Rand Bank is classified as E&S Category A in accordance with FMO’s Policy due to the large exposure to corporates and project finance. Corporate clients are active in a number of high E&S risk sectors: the chemical industry, downstream oil and gas, mining and agribusiness. The transaction will support First Rand Bank’s climate-related transactions including projects such as medium-sized renewable energy projects, energy/water efficiency projects, green buildings, wastewater treatment, urban drainage and flood mitigation projects. The expected associated E&S risks and impacts of this dedicated green loan are considered limited, largely reversible and can be addressed through mitigation measures. First Rand Bank is a signatory to the Equator Principles since 2009 and a founding member to the development of the Principles for Responsible Banking. As part of the agreement with First Rand Bank, the bank will be required to apply the internally adopted Exclusion List, local E&S laws and regulations and the IFC Performance Standards framework for certain identified projects.

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Date Total FMO financing
11/15/2018 USD 50.00 MLN
Website client
http://www.firstrand.co.za
Region
Africa
Country
South Africa
Sector
Financial Institutions
Signing date
8/4/2020
Total FMO financing
USD 75.00 MLN
Fund
FMO
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
A