(AfDB) - The African Development Bank Group has concluded the investment of R2 billion (around $116 million) in Sustainable Development Goals-linked bonds (SDG bonds) issued by Nedbank South Africa.

This investment, which is listed on the green bonds segment of the Johannesburg Stock Exchange, will strengthen Nedbank’s capital base and enable it to generate R12 billion ($696 million) in new loans and investments in environmentally friendly and climate-sensitive projects in areas such as renewable energy and affordable housing.

This SDG-linked Tier 2 bond issuance, the first of its kind in Africa, is expected to benefit the South African economy through the creation of over 6,000 new jobs and nearly 20,000 SME loans, in addition to catalyzing around R4 billion ($232 million) in additional investment in clean energy, which will help South Africa’s efforts to transit away from coal-generated power over the next 10 years.

The investment also promotes financial inclusion for underserved segments of the populace, such as women and rural dwellers, and will lead to around R2 billion ($116 million) in new SME loans over the next five years.

Notably, several thousands of unbanked persons across southern Africa will benefit from financial inclusion through Nedbank’s low-cost digital financing initiatives.

Stefan Nalletamby, the African Development Bank’s Director for the Financial Sector Department, said: “We are very pleased to be able to support the South African economy by injecting investment into the private sector through a responsible and trusted partner who is committed to responsible investing. This investment will help accelerate the recovery of the economy after the slowdown caused by the COVID-19 pandemic.”

The facility is aligned with the African Development Bank’s Ten-Year Strategy 2013-2022, which emphasizes green and inclusive growth. It is also in keeping with the Bank’s High 5 priorities: (i) Light up and Power Africa, (ii) Feed Africa (iii) Industrialize Africa (iv) Integrate Africa and (v) Improve the lives of African people.

Nedbank is one of South Africa’s four largest banks by assets, with a market capitalization in excess of R100 billion ($5 billion) and total assets of approximately R1 trillion ($58 billion). The Bank employs over 29,000 workers. The group has a presence in Namibia, Swaziland, Mozambique, Lesotho, Zimbabwe, as well as representative offices in Angola and Kenya. Nedbank also holds a 21% stake in the pan-African banking group Ecobank. Importantly, Nedbank has been a market leader in sustainability and responsible lending.