South Africa Is Identifying Projects to Fund With Green Bonds

South Africa is considering which areas of the current budget could be financed by the issuance of so-called green bonds, according to Dondo Mogajane, director-general of the National Treasury.

Mogajane made the comments at a conference organized by JSE Ltd. and sponsored by Citibank and Absa Group Ltd. that’s closed to the media. A recording of his comments was reviewed by Bloomberg.

“We are in very early stages around issuance of a bond like that, we still have to firm up our thoughts around what areas, which areas in the budget need support from green financing,” he said. “We are just simply substituting current funding options” and will need to stay under the current spending ceiling that has been agreed upon, he said.

South Africa has been criticized for its slow pace in seeking funding from investors keen to back sustainable and climate-friendly development even as it plans significant expenditure on infrastructure and needs to adapt from its heavy reliance on coal to comply with global climate-change commitments.

Public Works Minister Patricia de Lille in September last year said by the end of 2020 the government would outline plans for green bonds to help fund an infrastructure program of as much as 2.3 trillion rand ($163 billion) over a decade.

Mashudu Masutha-Rammutle, a spokeswoman for Finance Minister Tito Mboweni, said it had been the JSE’s decision to lock out the media. The JSE said it wanted investors to have frank conversations with ministers and therefore had decided not to invite the media.

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