Nedbank Corporate and Investment Bank (CIB) has successfully coordinated, arranged, and structured a R500 million sustainability-linked credit facility for Old Mutual Property, the first of its kind created for the company.
The five-year term loan has embedded features which will encourage increased consumption of renewable energy as a percentage of Old Mutual Property’s total energy mix and enhance grey and black water recycling plants at the six main shopping centres in its retail property portfolio.
According to Arvana Singh, Head of Sustainable Finance Solutions at Nedbank CIB, the deal was made possible through a shared understanding between Nedbank CIB and Old Mutual Property of the importance of driving sustainability forward in key economic sectors such as the retail property industry which is a relatively large user of electricity and water.
“Due to a combination of large floor spaces, a high number of tenants and occupants, and significant daily foot traffic, retail shopping centres consume large amounts of electricity and water,” Singh explains, “it is therefore a key imperative to target and transform the operations of these centres and use sustainability linked funding solutions as a lever to achieve this objective. Together with Old Mutual Property we were able to execute on our shared vision of driving sustainability forward”.
Peter Levett, Chief Executive Officer for Old Mutual Property, explains that the Key Performance Indicators included in the structure of the sustainability-linked term loan focus on the two sustainability themes of energy and water, which are significant focus areas for Old Mutual Property and for South Africa.
“The debt solution’s renewable energy targets align with the wider Old Mutual Limited decarbonisation strategy, while the water target promotes the recycling of water, which is a material environmental challenge within the real estate sector,” he explains, “these targets have multiple measurement periods at which Old Mutual Property’s performance in relation to these KPI’s will be measured. This is to incentivise Old Mutual Property to continually pursue sustainability performance improvement, thereby contributing to a low-carbon future and a lasting positive legacy for our industry”.
“Nedbank CIB has a well-established and proven ability to partner with its clients in the property finance space. Through delivering this innovative financing solution we are expanding our offering to Old Mutual Property, and at the same time advancing the sustainable development agenda for the country as a whole”, adds Gary Garrett, Managing Executive at Nedbank CIB Property Finance.