Standard Bank pioneers SA’s first automotive sustainability-linked loan
The bank partnered with Motus Holdings to create a financing solution that aligns with its environmental, social and governance commitments
Standard Bank has successfully led an arrangement of the first SA-based sustainability-linked funding in the automotive sector.
The transaction comprises R6bn sustainability-linked term facilities and a R800m sustainability-linked working capital facility for leading automotive group, Motus Holdings.
The R6.8bn funding package highlights the importance of Motus’s environmental, social and governance (ESG) journey.
What is a sustainability-linked loan?
Sustainability-linked loans tie the terms of funding to ESG outcomes to support and incentivise responsible corporate behaviour and the creation of shared value. Motus receives an incentive in the form of a favourable rate benefit only if it achieves its key performance indicators (KPIs).
This drives Motus’s environmental and social impact through material KPI selection and setting ambitious targets, with a focus on its own road fuel consumption, water consumption, electricity efficiency and gender equality to drive diversity and inclusion.
What was Standard Bank’s role?
As lead arranger, book-runner and sustainability co-ordinator, Standard Bank brought market participants together to successfully syndicate its first SA-based sustainability-linked funding. The bank was able to partner with Motus in creating a financing solution that supports the continued growth ambitions of the business, while also aligning with its ESG commitments.
ESG performance as a financial priority
Standard Bank is focused, primarily through its Sustainable Finance division, on providing financial products and services that support positive ESG outcomes.
This includes green and social bonds, sustainability-linked loans and bonds, sustainable trade and working capital solutions.
“ESG performance is both a financial and ethical priority. Companies that operate in a sustainable manner tend to have lower risk profiles and outperform those that don’t over the long-term. For this reason, demand continues to grow for sustainability-linked financing that can offer clients the opportunity to narrow the focus on its environmental impact strategy and to deliver socioeconomic impact,” says Anneke Lund, sustainable finance executive at Standard Bank.
Motus CEO Osman Arbee says partnerships remain vital in providing access to financing for the company’s expansion plans and in leveraging its extensive reach, experience and insight into the African market’s social, economic and regulatory landscape.
“As Motus enters its 75th year of operations, the commitment to ESG practices and principles will ensure the company remains a sustainable and valuable contributor to customers, employees, supply chain partners and the communities where Motus operates,” says Arbee.
For more information visit: www.standardbank.com
This article was paid for by Standard Bank.