IFC Invests R750m In Green Bond For Redefine Properties
IFC Invests R750m In Green Bond For Redefine Properties. Redefine’s green building journey continues to make a difference to the planet with the issuance of its first green bond, with the IFC as anchor investor.
Globally the market for green bonds had grown over 100% year on year as at December 2021, according to RMB, but Africa is lagging well behind. Redefine, however, has placed ESG at the heart of our business and this bond opens another exciting chapter on our journey to achieving a long-term target of net zero carbon status by 2050. The green bond, Redefine’s first, was oversubscribed and raised R1.5 billion at an auction on September 16th.
“This bond helps promote sustainability and climate-smart commercial real estate in South Africa, and it was pleasing to note that the bond was well-oversubscribed, indicating heightened demand for companies doing the right thing,” says Ntobeko Nyawo, Redefine’s Chief Financial Officer. Redefine Properties led the charge towards a sustainable future in the property sector with a R1 billion issuance for its first sustainability-linked bond in July last year.
“Today’s green bond further amplifies our commitment to placing ESG at the heart of what we do,” says Nyawo. “It diversifies our funding profile, creates liquidity headroom and significantly, this bond is structured on a use-of-proceeds basis, which means it will directly finance only highly rated green buildings, which is firmly in line with Redefine’s over-arching, long-term climate-resilience framework.” The IFC will invest up to R750 million (about $44.1 million) in the bond to support Redefine to refinance its Green Star SA certified assets, which incorporate energy and water efficiency measures.
The green bond aligns with the International Capital Market Association Green Bond Principles. It was listed on the Johannesburg Stock Exchange (JSE) in the Sustainability Segment, a platform for companies to raise debt for green, social, and sustainable initiatives. Anelisa Keke, chief sustainability officer at Redefine, says Redefine’s green building journey goes back to 2012 when the company got its first Green Star SA certification.
“Since then we have obtained several Green Star SA certifications. Our Green Building programme is part of a long-term journey towards achieving net zero status and provides our key stakeholders with proof that our certified assets have a positive impact on the environment, as well as the health and well-being of our occupants.” Green Star SA rated assets, on existing building performance, are independently certified by the Green Building Council of South Africa every 3 years and are rated based on a variety of operational factors, including (but not limited to) energy and water performance, waste management and recycling, indoor air quality, and green tenant guidelines, including green leases.
“This certification does more than simply focus on the resource efficiency of the building (i.e. energy, water and waste); rather, it rates the holistic sustainability features of the asset,” says Keke. IFC’s investment will be used exclusively to refinance existing green buildings which have achieved a minimum Green Star 4 category certification.
