The Industrial Development Corporation (IDC) has issued a R2.046 billion maiden sustainability bond, exceeding its R1.5bn target amid strong investor demand, the state-owned funder said this week.

The bond, oversubscribed with an orderbook of R3.464bn, was issued in 5-, 7-, 10-, and 12-year tenors, with proceeds earmarked for projects under IDC’s Sustainable Finance Framework, including renewable energy and green hydrogen initiatives.

The International Finance Corporation (IFC), part of the World Bank Group, anchored the issuance with a subscription of over R1bn.

IDC CEO Mmakgoshi Lekhethe said, “This achievement underscores the market’s confidence in our commitment to investing in sustainable and climate-resilient projects that seek to strengthen and industrialise South Africa."

She said among other projects the IDC has a promising pipeline in renewable energy projects including its ongoing support to commercialise the local green hydrogen economy.

The South Africa-based development funder aims to, among other goals, bolster industrialisation of the local economy, support employment generation, promote socioeconomic advancement and empowerment, and finance climate and environmental initiatives.

“This inaugural sustainability bond marks a significant milestone in our commitment to sustainable development. Our partnership with IFC exemplifies the power of collaboration in mobilising capital towards impactful environmental and social projects,” Lekhethe added.

IFC regional director for Southern Africa Cláudia Conceição said: “Our anchor investment in IDC’s inaugural sustainable bond issuance will not only mobilise additional investor participation but also empower Micro, Small, and Medium Enterprises in the manufacturing sector, while supporting the government’s Just Energy Transition investment plan.”

The bond aligns with IDC’s ‘New Pathways for Sustainable Industrial Development Framework,’ aimed at expanding industrial capacity in a socially inclusive and environmentally responsible way.

IDC chief financial officer Isaac Malevu added: “IFC’s subscription to this facility reflects investor confidence in the IDC.”

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IDC launches R2bn sustainability bond amid strong investor demand