Business
UK development arm makes first, $150 mln push into energy transition financing
UK development arm makes first, $150 mln push into energy transition financing
About this update from Firstrand Limited
By Colleen GokoBritish International Investment, the UK's development finance institution, announced on Tuesday it would provide a $150 million facility to South Africa's FirstRand JSE:FSR to support African companies in reducing carbon emissions. The funding, BII's first foray into energy-transition finance, will be channelled through FirstRand's business banks RMB and FNB and target high-emission companies willing to adopt cleaner technologies and lower-carbon practices, the institutions said.Transition finance loans are intended to help heavy emitters to modify their operations, rather than restricting their access to funding.The 2025 South African Climate Finance Landscape study estimates the country raised an annual average of approximately 188 billion rand ($10.4 billion) for climate-related projects in 2022-23.However, South Africa may require up to 500 billion rand a year to meet its climate goals, leaving a potential annual financing gap of over 300 billion rand.A significant portion of current funding is allocated to power projects such as wind and solar farms, while only a small share supports initiatives helping communities to adapt to climate change or transition from coal. Domestic institutions contributed nearly 60% of the funding, with commercial banks the largest private financiers."This investment marks a pivotal step in our strategy to accelerate decarbonisation where it matters most," said Stephen Priestley, BII managing director.