Pacific Investment Management Co (Pimco) has agreed to lend a South African state development bank R3 billion, the first deal in a United Nations programme to fund green energy in Africa.
The debt securities from Pimco, an US investment group that manages $2.2 trillion in assets, will be used to refinance debt that South Africa’s Development Bank of Southern Africa has in renewable projects, with the funding to go toward investing in additional capacity.
There is “ongoing interest from our stakeholders in well-structured products that also achieve tangible progress for sustainable energy development in Africa,” Scott Mather, Pimco’s chief investment officer, said in a statement on Tuesday.
“What we thought of was, many years later are we still going to be running after the $100 billion or are we going to try a new and innovative approach,” to bring in the private sector, she said.
A number of other deals are under discussion that could follow South Africa and Pimco had an appetite for an amount four times the size of the initial deal, she said. “There are many more countries that I think now will come behind because everybody waits for the first mover.”
Standard Chartered was the placement agent and structuring adviser in the transaction. Fieldstone Private Capital Group acts as programme advisor and was the transaction originating bank.-moneyweb
