Financial services firm Nedbank Corporate and Investment Banking (CIB) has coordinated, arranged and structured a R500-million sustainability-linked credit facility for Old Mutual Property to encourage increased consumption of renewable energy as a percentage of Old Mutual Property’s total energy mix and enhance grey and black water recycling plants at the six main shopping centres in its retail property portfolio.
The five-year term loan was made possible through a shared understanding between Nedbank CIB and Old Mutual Property of the importance of driving sustainability forward in key economic sectors, such as the retail property industry, which is a relatively large user of electricity and water, said Nedbank CIB head of sustainable finance solutions Arvana Singh.
The key performance indicators (KPIs) included in the structure of the sustainability-linked term loan focus on the two sustainability themes of energy and water, which are significant focus areas for Old Mutual Property and for South Africa, said Old Mutual Property CEO Peter Levett.
“The debt solution’s renewable energy targets align with the wider Old Mutual Limited decarbonisation strategy, while the water target promotes the recycling of water, which is a material environmental challenge within the real estate sector.
“These targets have multiple measurement periods at which Old Mutual Property’s performance in relation to these KPIs will be measured. This is to incentivise Old Mutual Property to continually pursue sustainability performance improvement, thereby contributing to a low-carbon future and a lasting positive legacy for our industry,” he explained.
Retail shopping centres consume large amounts of electricity and water owing to large floor spaces, a high number of tenants and occupants and significant daily foot traffic.
“It is, therefore, a key imperative to target and transform the operations of these centres and use sustainability linked funding solutions as a lever to achieve this objective,” said Singh.
Old Mutual Property is a wholly owned subsidiary of Old Mutual Limited, which has an overarching sustainability strategy, which seeks to deliver sustainable development inputs across the economic, social and environmental systems in which its various businesses operate.
“This deal supports the Nedbank Group’s purpose to use our financial expertise to do good, which we strive to do consistently by using our deep understanding of our client’s businesses and harnessing our expertise and experience to deliver impactful solutions,” she said.