Standard Bank Group Obtains $200m, ZAR 3.6bn Facilities from AfDB

Standard Bank Group Obtains $200m, ZAR 3.6bn Facilities from AfDB

Standard Bank Group has obtained two facilities, $200 million and ZAR 3.6 billion, from the African Development Bank (AfDB) following a board of directors approval, the regional lender said in a statement.

According to AfDB, the two financial facilities for the South-Africa based Standard Bank Group are to support economic development in Africa.

The first is a $200 million trade finance risk participation agreement (RPA) for Standard Bank of South Africa Limited; the second is a ZAR 3.6 billion investment in a social bond issued by the Standard Bank Group (SBG).

The partnership will bolster Standard Bank Group’s capital, increase support for small and medium-sized enterprises (SMEs) in South Africa, and expand trade across the African continent.

The social bond, to be listed on the Johannesburg Stock Exchange, represents an innovative approach to sustainable financing. Bond proceeds will go to support SME lending initiatives under the Standard Bank Group’s Sustainable Finance Framework.

The Risk Participation Agreement will enable the scale up of trade finance support to local banks, thus enhancing trade finance capabilities across the continent, including in low-income countries and transition states. This will alleviate trade financing constraints for businesses and reduce the trade finance gap on the continent while promoting intra-African trade.

African Development Bank Vice President for Private Sector, Infrastructure and Industrialization Solomon Quaynor said: “This partnership between the African Development Bank and Standard Bank Group exemplifies our commitment to driving sustainable economic growth in Africa.

“By supporting SMEs and fostering inclusive financial solutions, we are taking significant steps towards achieving our vision of a prosperous continent where every individual has the opportunity to thrive.”

Commending Standard Bank Group on its commitment to sustainability, African Development Bank Director for Financial Sector Development Ahmed Attout said: “This intervention innovatively builds on SBG’s Sustainable Finance Framework, utilizing local debt capital markets to support financing to key segments including SMEs.”

Standard Bank Group’s Deputy CEO Kenny Fihla hailed the African Development Bank Group as a strategic partner.

“Structuring the funding as a social bond highlights the importance of the group’s social impact and aligns with the continued support of our existing strategy within our Business and Commercial Banking division to drive financial inclusion through lending to SMEs in our biggest market, South Africa,” he said.

Fihla, who is also CEO of Standard Bank of South Africa Limited, explained that the Risk Participation Agreement facility would enhance the organisation’s trade finance capabilities and contribute towards the group’s strategic objective of bridging the trade finance gap in Africa.

“This will ultimately reduce trade financing constraints for local African banks and promote intra-African trade,” he said.

AfDB said its Board approval is aligned with the African Development Bank’s new Ten-Year Strategy (2024 – 2033) to transform African economies. It will support industrialisation, and regional integration, and improve the quality of life for all Africans. #Standard Bank Group Obtains $200m, ZAR 3.6bn Facilities from AfDB Namibia Central Bank Cuts Interest Rate to 7%