Thursday, November 8, 2012

PIC concludes R5bn 'green bond' with IDC

IDC CEO Geoffrey Qhena
Picture by: Duane Daws
IDC CEO Geoffrey Qhena

The Industrial Development Corporation (IDC) has concluded a R5-billion private placement with the Public Investment Corporation (PIC) for a 'green bond', established to facilitate funding for businesses looking to invest in clean-energy infrastructure developments.

The partnership was in line with the Integrated Resource Plan 2010, which envisages renewable energy contributing 42% of the total new generation added to South Africa's electricity mix between 2010 and 2030.

IDC CEO Geoffrey Qhena said the pipeline for clean energy infrastructural investments over the next five years was encouraging and would contribute to South Africa's job-creation ambitions.

The IDC had earmarked about R25-billion to 2016, for the development of green industries in South Africa and its Green Sector Business Unit would disburse funding to eligible projects.

“Last year, IDC committed R5.2-billion to consortia awarded successful bid status in the Department of Energy’s renewable energy procurement programme’s first round of bidding. In the second bidding round, the IDC further committed R2.3-billion to seven projects awarded successful bid status,” Qhena added.

PIC chief investment officer Dan Matjila indicated that the partnership with the IDC represented an important milestone in the implementation of the development investment policy of the Government Employee Pension Fund (GEPF) on whose behalf the PIC invests.

“The policy seeks to invest in renewable-energy projects and other infrastructural projects that make good investment sense, while contributing to SA’s developmental agenda,” Matjila explained.

The bonds’ tenure is 14 years and would be issued in tranches depending on the project pipeline and uptake, with R500-million earmarked as the initial tranche.

“As a universal investor with exposure to critical sectors of the local economy, sustainable energy supply is important to us as a lack thereof negatively impacts the economy and our investment portfolio,” GEPF principal officer John Oliphant said.

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