Picture: 123RF/lovelyday12
Picture: 123RF/lovelyday12

Pacific Investment Management has agreed to lend Development Bank of Southern Africa (DBSA) R3bn, the first deal in a UN programme to fund green energy in Africa.

The money from Pimco will be used to refinance debt that DBSA has in renewable projects, with the funding to go towards investing in additional capacity.

There is “ongoing interest from our stakeholders in well-structured products that also achieve tangible progress for sustainable energy development in Africa,” Scott Mather, Pimco’s chief investment officer, said in a statement on Tuesday.

The UN Economic Commission for Africa (Uneca) is running the programme, which aims to see the construction of 10,000MW of green energy generation capacity. Leaders in Africa are pushing for funding to transition away from the fossil fuels their economies already use and to build the clean energy they need to power industrialisation plans.

Broken promises

The failure of rich nations to live up to their pledge to provide $100bn a year to help poor countries combat climate change and transition to green energy has been an impetus for the programme, said Vera Songwe, Uneca’s executive director, said in an interview.

“What we thought of was, many years later are we still going to be running after the $100bn or are we going to try a new and innovative approach,” to bring in the private sector, she said. 

There are a number of other deals under discussion that could follow SA and Pimco had an appetite for an amount four times the size of the initial deal, she said.

Standard Chartered was the placement agent and structuring adviser in the transaction.

Bloomberg News. More stories like this are available on bloomberg.com

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