The Development Bank of South Africa (DBSA) has launched its first green bond through a private placement with the French Development Agency (AFD). The purpose of the loan is to mobilize 200 million euros to finance projects that can contribute to climate change mitigation and/or adaptation in South Africa.

According to the DBSA, this initiative is in line with the objective of South Africa’s National Development Plan (NDP), namely a “fair and environmentally sustainable transition to a low-carbon economy,” and is consistent with the Sustainable Development Goals (SDGs). The South African bank also intends to use this mechanism to increase its climate finance tenfold.

“The bond will be structured in accordance with the bank’s recently published Green Bond Framework, which reiterates the DBSA’s commitment to play a role in the just transition to a low-carbon economy. The framework is aligned with the International Capital Markets Association (ICMA) Green Bond Principles,” said DBSA. The South African government-owned bank is not a first-time climate and sustainable development initiative.

The DBSA is involved in the development of renewable energy, notably through the Renewable Energy Independent Power Producer Procurement (REIPPP). This ambitious programme was launched by the South African government to attract investment from independent power producers (IPPs). The bank is now accredited with the Global Environment Facility (GEF) and the Green Climate Fund (GCF).