ADVERTISEMENT

Investec Pilots Plan for Customers to Fit Homes With Solar Power

Investec Pilots Plan for Customers to Fit Homes With Solar Power

Investec Ltd. is planning funding for private-banking clients in South Africa to install solar power at home in an effort to help its customer base lower its carbon footprint while at the same time avoiding the country’s recurrent power cuts.

The product, to be piloted from September, advises customers on installation and pricing options, and allows them to link the cost to their mortgages as a repayment option. The service is one of several initiatives the lender is exploring to capitalize on carbon-efficient behavior, Investec’s Head of Sustainability, Tanya dos Santos, said in an interview.

“First and foremost, our aim is to recognize that there are not only risks to climate change,” she said. “There are also many business opportunities.”

The cost of installing solar panels and storage batteries at an average suburban house in South Africa ranges from about 110,000 rand ($6,400) to 250,000 rand.

Instead of shunning lending activities linked to fossil fuels entirely, as other finance firms have done, Investec’s goal is to urge clients to invest in cleaner technologies and businesses by making it attractive for them to do so.

Sweeping Clean

South African companies are coming under increasing pressure from shareholders to improve their disclosure around greenhouse gas emissions. While FirstRand Ltd. and Standard Bank Group Ltd. have committed to making such disclosures, they have pushed back against tight schedules demanded by activists, saying more time is needed to assess lending in Africa, where data can be sketchy.

Investec is now disclosing its fossil-fuel lending exposure and will do so annually. Standard Bank expects to report on the climate risk in its lending by year end.

Investec’s work is more advanced in markets beyond South Africa. In July it arranged and acted as a sustainability coordinator for a 600 million euro ($716 million) loan to Investindustrial Advisors SpA. The facility offers reduced interest payments to the borrower when certain environmental, social and governance goals are met. Earlier this month it also launched an ESG-linked deposit plan to clients in the U.K.

While South African activities have lagged the progress in other markets, clients in the country are opening up more to environmental issues, Dos Santos said. With high levels of pollution and an unstable electricity supply, there is little choice but to embrace cleaner energy.

Investec’s renewable energy fund, Revego Africa Energy Ltd., will list on the Johannesburg Stock Exchange later this year after delays due to the Covid-19 pandemic, Dos Santos said. The bank is also exploring social-development-goal bonds for clients and as a means to raise finance for its own activities.

“We can get better lending rates if we commit to certain ESG criteria and we are exploring all these options,” she said.

©2020 Bloomberg L.P.