SA’s First ZAR-based Automotive Sector Syndicated Sustainability-Linked Facility

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Anneke Lund, Sustainable Finance Executive at Standard Bank Group.
Anneke Lund, Sustainable Finance Executive at Standard Bank Group.

Standard Bank has successfully led an arrangement of the first ZAR-based sustainability-linked funding in the South African automotive sector.

The transaction comprises ZAR 6 billion sustainability-linked term facilities and a ZAR 800 million sustainability-linked working capital facility for leading automotive group, Motus Holdings. The ZAR 6.8 billion funding package highlights the importance of Motus’ environmental, social and governance (ESG) journey.

Click here for more information about this from Standard Bank

What is a sustainability-linked loan?

Sustainability-linked loans tie the terms of funding to ESG outcomes to support and incentivise responsible corporate behaviour and the creation of shared value. As Motus achieves its key performance indicators (KPIs), it receives an incentive in the form of a favourable rate benefit and vice versa should it not achieve its KPIs.

This drives Motus’ environmental and social impact through material KPI selection and setting ambitious targets, with a focus on its own road fuel consumption, water consumption, electricity efficiency and gender equality to drive diversity and inclusion.

What was Standard Bank’s role?

Standard Bank’s role as mandated lead arranger, bookrunner and sustainability coordinator brought market participants together to successfully syndicate its first ZAR-based sustainability-linked funding in South Africa. The Bank was able to partner with Motus in creating a financing solution that supports the continued growth ambitions of the business while also aligning with its ESG commitments.

ESG performance as a financial priority

Standard Bank is focused, primarily through its Sustainable Finance division, on providing financial products and services that support positive ESG outcomes, including green and social bonds, sustainability-linked loans and bonds, sustainable trade and working capital solutions.

“ESG performance is both a financial and ethical priority. Companies that operate in a sustainable manner tend to have lower risk profiles and outperform those that don’t over the long-term. For this reason, demand continues to grow for sustainability-linked financing that can offer clients the opportunity to narrow down the focus on its environmental impact strategy and to deliver socio-economic impact,” says Anneke Lund, Sustainable Finance Executive at Standard Bank Group.

CEO of Motus, Osman Arbee, says partnerships remain vital in not only providing access to financing for the company’s expansion plans, but also in leveraging its extensive reach, experience, and insight into the African market’s social, economic, and regulatory landscape.

“As we enter our 75th year of operations, our commitment to ESG practices and principles, will ensure we remain a sustainable and valuable contributor to our customers, employees, supply chain partners and the communities in which we operate,” said Arbee.

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This post and content is sponsored, written and provided by Standard Bank. 


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