50005 - SBSA MAGC

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Summary of Investment Information

Project Number

50005

Company Name

THE STANDARD BANK OF SOUTH AFRICA LTD

Date SPI Disclosed

Mar 4, 2025

Country

South Africa

Region

Africa

Projected Board Date

Dec 19, 2024

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Mar 5, 2025

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Dec 19, 2024
Signed : Feb 17, 2025
Invested : Feb 27, 2025

Sector

Commercial Banking - Housing Finance

Additional Project Attributes

Blended Finance

Project Description

The proposed investment is a US$250 million senior unsecured loan, with a 7-year tenor (bullet), to Standard Bank of South Africa Limited (“SBSA” or the “Bank”) to support the growth of SBSA’s EDGE-certified (or equivalent green certification acceptable to IFC) green building finance and green home loan portfolios in South Africa. Beneficiaries of the IFC loan are expected to benefit from performance-based incentives (“PBI”) to be provided by the UK Market Accelerator for Green Construction’s (“MAGC”) Program (the “Project”).

Associated Advisory Engagement

IFC will also provide Advisory Services to the Bank in the form of capacity building and technical support on EDGE certification.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	250.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Syndications	Housing Loans to Individuals
Straight Senior Loan	Housing Loans to Individuals

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The most significant expected project-level outcome is increased access to climate finance (through green buildings and green affordable and women housing finance) in South Africa. Beyond the Project, IFC anticipates that its updated systematic engagement at both the sectoral and financial institutions levels, through investments, upstream, and AS, will help scale up climate finance and strengthen green finance standards in the country and encourage replication by other institutions, thus, contributing towards increased environmental sustainability through the demonstration and capacity building channels.

IFC’s additionality through the Project is both financial and non-financial. Financial additionality takes the form of (i) financing structure by providing long-term funding to enable SBSA to support its loans to developers (supply side) and home loans to home buyers (demand side); and (ii) resource mobilization. Non-financial additionality takes the form of knowledge sharing and capacity building by providing technical support and in-depth training to SBSA’s property finance team and other stakeholders to improve the Bank’s capacity to originate and manage loans for certified green buildings.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Access to Finance: Outstanding Housing Finance Portfolio (#)	Outstanding Portfolio (#) [Actual]		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Access to Finance: Outstanding Housing Finance Portfolio ($)	Outstanding Portfolio ($) [Actual]		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment

E&S Category Rationale / Risks and Mitigation

The Project will support SBSA in financing EDGE-certified (or equivalent green certification acceptable to IFC) green building development and green home loans in South Africa. The E&S risks associated with property development are expected to be medium, while those associated with home loans are expected to be low, therefore the Project has been categorized as FI-2 according to the IFC's Sustainability Policy. The key risks and impacts of the Project derive from the Bank's capacity to identify and manage potential environmental and social (E&S) risks associated with its lending activities. These risks are typically associated with labor and working conditions, occupational health and safety, pollution prevention and atmospheric emissions, waste and wastewater management, amongst others. SBSA has developed and is implementing an E&S risk management system and has appointed adequate E&S capacity in line with the E&S requirements for this Project.

The Bank is an existing IFC client with a satisfactory E&S performance. An assessment of labor practices in relation to Performance Standard 2 and life and fire safety requirements revealed that the Bank meets the respective IFC requirements. As part of this Project, SBSA will enhance its ESMS with a clearly defined mechanism to verify the use of proceeds in line with the eligibility criteria for the certified green building loans. IFC's investment will not be used to support any coal-related activities or any Higher-risk activities that may include: (a) involuntary resettlement; (b) potential adverse impacts on Indigenous Peoples; (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage; or (d) significant occupational health and safety risks. For this Project, IFC's applicable requirements for the certified green building development loans are the IFC Exclusion List and E&S laws in South Africa, as well as screening against the IFC Performance Standards. SBSA will also be required to continue meeting labor and working conditions in line with IFC Performance Standard 2 and IFC's Life and Fire Safety Standards for financial intermediaries.

IFC will periodically disclose the names, locations and sectors for Category A sub-projects that have been supported by IFC investments through financial intermediaries, subject to regulatory constraints and market sensitivities. The sub-project(s) listed below reflect(s) the status of the portfolio as of July 1, 2020.

IFC will periodically disclose the names, locations and sectors for qualifying sub-projects that have been supported by this IFC investment, subject to regulatory constraints and market sensitivities. Any qualifying sub-project(s) will be disclosed during the annual reporting cycle established with the client.

SBSA has an E&S risk team and an ESMS for identifying, assessing, and managing the E&S risks and impacts associated with their lending activities. The E&S policies and procedures align with the regulatory requirements in South Africa, and where applicable, the IFC Performance Standards the Equator Principles and other voluntary standards. For the certified green building loans, SBSA undertakes an initial screening of the client as well as the transaction to determine the level of E&S due diligence. Qualified E&S staff undertake internal E&S due diligence (ESDD) while external consultants conduct ESDDs of sub-projects that meet the Equator Principles thresholds and product types. The outcomes of the initial screening and the E&S due diligence are summarized in the credit paper and considered in the decision-making process. Legal agreements may include E&S risk warranties, undertakings and indemnification or customized E&S provisions, including E&S action plan, if applicable. Monitoring is conducted post disbursement to ensure that all appropriate E&S risk management covenants, warranties or conditions included in the loan documentation have been fulfilled and remain current. To meet the Project requirements, SBSA will complement its existing ESMS with a process to allow the identification of eligible projects under this facility, including screening out of higher-risk activities.

Contacts

For Inquiries About the Project, Contact

The Standard Bank South Africa Limited
Marc Hearn
Head of Strategic Funding
+27 11 344 5004
Marc.Hearn@standardbank.co.za
50 Bath Ave, Rosebank, Johannesburg, 2196
https://www.standardbank.co.za/southafrica/personal/about-us

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

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Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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