SA’s first rand-based automotive sector syndicated sustainability-linked facility

Standard Bank has successfully led an arrangement for the first rand-based sustainability-linked funding in the South African 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?

Standard Bank’s role as mandated lead arranger, bookrunner and sustainability co-ordinator brought market participants together to successfully syndicate its first rand-based sustainability-linked funding in SA.

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, including 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 down the focus on its environmental impact strategy and to deliver socio-economic 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 we enter our 75th year of operations, our commitment to ESG practices and principles, will ensure we remain a sustainable and valuable contributor to our customers, employees, supply chain partners and the communities in which we operate,” says Arbee. 

For more information visit: www.standardbank.com

This article was paid for by Standard Bank. ​