FIRSTRAND BANK LIMITEDStatus: Approved investment
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Who is our customer
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.
What is our 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 do we fund this investment?
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.
What is the Environmental and Social categorization 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.
|Date||Total FMO financing|
|11/15/2018||USD 50.00 MLN|
- Website customer/investment
- South Africa
- Financial Institutions
- Effective date
- Total FMO financing
- USD 75.00 MLN
- FMO NV
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)