African Rainbow Energy and Power (AREP) and Absa today launched a new entity called African Rainbow Energy as an African-led, world-class, renewable energy investment platform.

AREP will make an initial investment of assets covering wind, solar photovoltaic and biomass projects with an installed capacity of more than 700 megawatts of renewable energy. Absa will make an initial investment of R500 million in cash, and transfer R5 billion of its existing renewable energy assets to African Rainbow Energy. This will result in African Rainbow Energy having approximately R6.5 billion of gross assets, covering 31 renewable assets, making it one of the largest and most diverse independently owned energy businesses in South Africa.

The establishment of African Rainbow Energy expands the pool of funding available for renewable energy developments in South Africa, at a time when the country is accelerating its plans to expand and diversify its energy base through the Renewable Energy Independent Power Producer Programme (REIPPP). The private sector is simultaneously expanding its energy supply. This is an important step for the South African economy, which aims to source reliable and cost-effective renewable energy to drive growth and employment.

This collaboration supports AREP’s objectives to utilise modern and renewable energy technologies to provide affordable electricity in South Africa and on the African continent. Absa is uniquely positioned given its key role in the African continent’s economy and its commitment to the development of renewable energy and the green economy. Absa is a leading funder in the renewable energy market and this transaction expands its participation in this important sector.

“Renewables have been one of the most successful asset classes globally, offering a unique mix of attractive long-term, inflation-linked returns and growth providing significant scope to deploy further funds. African Rainbow Energy is engaging with other investors to increase its equity base and fund further growth with the aim of listing on the JSE in future,” said Brian Dames, African Rainbow Energy Chief Executive Officer. “African Rainbow Energy is uniquely positioned to access these investment opportunities given its track record for competence and delivery, its unique network of entrepreneurs and its partnership with entities that have a history of empowering women, youth, rural and urban communities.”

African Rainbow Energy will invest in renewable technologies including solar, wind, and battery energy storage solutions. It has already secured a deep investment pipeline and has partnered on a number of bids into Round 5 of South Africa’s highly successful REIPPP.

African Rainbow Energy will also invest in the private power sector and is working with several companies on bespoke energy solutions.

“Our participation in African Rainbow Energy underscores Absa’s commitment to support renewable energy development and enhance the green economy, as part of our sustainability agenda,” said Jason Quinn, Absa interim Group Chief Executive. “Renewables are an important part of Absa’s sustainability strategy and we target financing or arranging more than R100 billion for environment, social and governance-related projects by 2025.”

Absa not only brings capital to the initiative but also expertise and experience in renewable energy financing. It is at the forefront of financing renewable energy in South Africa, having funded 33 projects to date, representing approximately 3 gigawatts, which amounts to 46% of the total projects closed to date in South Africa. Absa’s renewable energy loans amounted to R20 billion at 31 December 2020.

Dr. Patrice Motsepe said “approximately 15 years ago, we set out to create a world-class African energy company that would provide investors with predictable and growing returns from a clean energy portfolio of environmentally responsible assets. This energy company would also contribute to the growth of the South African economy and the economies on the rest of the African continent while improving the living conditions of the poor, unemployed and marginalised. Absa is a like-minded partner that shares our vision of building this initiative at scale in Africa.”

AREP’s holding company, Ubuntu-Botho Energy Holdings Proprietary Limited, was founded by Dr. Patrice Motsepe and is the only African company that is a partner in the Breakthrough Energy Ventures which was started by Bill Gates and includes several globally respected leaders including Jeff Bezos, Richard Branson, Jack Ma, Mukesh Ambani and others. Breakthrough Energy Ventures is an investor-led fund that is building new, cutting-edge companies that aim to provide energy with zero emissions.

“Our investment in African Rainbow Energy creates an opportunity for Absa to increase our role in the much-needed expansion of the renewable energy sector,” said Quinn.

“The fund will provide investors with exposure to utility-scale, commercial and industrial sector clean-energy investments, building a platform of scale in South Africa, and will seek selected, bankable projects in Africa,” said Dames.

The effective date of the fund is subject to the fulfillment of certain conditions precedent, which are expected to be concluded in the fourth quarter of 2021.

• Joining forces to rally behind the launch of a social movement to condemn the events of the past week and show the world that we are not giving in to hatred.
• Calling on all South Africans to share their stories of hope and reconciliation and unity.
• Use #ThisIsUs to show the world who we are.

Over the past week, we have watched in anguish as some parts of our country experienced extreme levels of lawlessness. It’s a scary time in South Africa. For us all. We are all angry, we are all scared, we are all heartbroken and we are all feeling helpless. Almost numb. At a loss for words.

Our ideal cannot end here.

#ThisIsNotUs

As we commemorated our beloved Madiba’s birthday this past weekend, it is a time for all of us to reflect on his legacy and to help our country get through this difficult challenge we are facing by recommitting ourselves to the ideals of our democracy.

Corporate South Africa, a host of media partners and organisations representing business interests are joining forces to rally behind the launch of a social movement to condemn the events of the past week and show the world that we are not giving in to hatred.

That we cannot be plagued by fear, raged by anger, and gripped by violence.

“You will note #ThisIsNotUs and #ThisIsUs is not Absa-branded, but an effort to rally ordinary South Africans and other corporate and business partners to join the movement, to take a stand against the violence and hatred of the past week and share our stories of hope and reconciliation and unity,” says David Wingfield, Head of Marketing of the Absa Group.

Using #ThisIsNotUs and #ThisIsUs, we are calling on all South Africans to show the world that hate cannot be replaced with hate and that retaliation will not put an end to violence.

“While the situation seems dire, we dare not lose hope. The idea of starting this movement was born from a conversation we had earlier this week with our advertising agency, Grid Worldwide. We agreed that something had to be done. This is the spirit of Africanacity, our commitment to helping people find a way to get things done,” notes Wingfield.

“As an organisation that is part of the fabric of our society, and which cares deeply for our collective future, we are standing up and uniting with many of our peers in saying #ThisIsNotUs. Today we begin another long walk to rebuild our country, and all South Africans have a role to play to bring an end to this hatred, violence and chaos.”

The month of July, and Mandela Day this Sunday, is a time to observe the legacy of Madiba, who never forgot the importance of serving and helping others to “create a better world for all who live in it.

All South Africans are called upon to join the movement and use #ThisIsNotUs to show the world that we condemn the ugliness, the hatred, the fear. It is not who we are.

In addition, South Africans are also called upon to use #ThisIsUs to get behind the growing number of communities and brave individuals who are stepping up, who are making a difference, who are reaching out, and getting involved in a positive way.

“During the past week we have seen scores of volunteer groups who have set up cleaning efforts in looted shopping malls and communities, and donations in the form of money, transport and food to those affected. Let’s get those stories out there, use #ThisIsUs when you witness acts to rebuild our country in your community,” Wingfield explains.

“We need you to get the message out there, and the social media collateral was created for all South Africans to use and share.”

For more information on the movement, click here.

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) edged down slightly to 57.4 index points in June 2021 from 57.8 in May 2021. All 5 of the headline PMI’s major sub-components were above the neutral 50-point mark in June. Furthermore, the average reading of both the headline PMI as well as the business activity index during the second quarter was higher than recorded in the first quarter of 2021. This suggests that the sector’s output recovery was maintained in the second quarter, with another quarterly expansion likely. A significant annual expansion is effectively guaranteed given the extremely low base set in the second quarter of 2020.

However, the move to adjusted alert level 4 lockdown restrictions at the end of June, especially if sustained for longer than the initial two-week period, could stall the broader economy’s quarterly growth momentum at the start of the third quarter. This could result in a possible slowdown in the demand for selected manufactured goods and production as a result. Indeed, amid concerns about the magnitude of the third wave of COVID-19 infections and South Africa’s move from level 2 to level 3 in mid-June, purchasing managers’ assessment of expected business conditions already turned less positive in June. The index tracking expected business conditions in 6 months’ time declined for a second month to 59.3, signalling an anticipated improvement in business conditions, just less so than before. The move to level 4 is likely to have soured expectations further, specifically for those businesses with close ties to the hospitality industry. On the positive side, the outlook for manufacturers targeting the European and US export markets remains very bright, with recent international PMI readings remaining at or near record-high levels.

The June PMI results suggest that while growth in new sales orders and business activity slowed somewhat, both remained very strong. Indeed, on the demand front in particular, after dipping somewhat in May, export sales also returned to positive terrain. Overall, the business activity index dipped to 56.2 index points from 58.8 in May, while sales orders declined to 57.3 from 60.5 the month before. Another positive development was the return of the employment index to above the neutral 50-point mark. However, even if this means that job losses in the sector have now stopped, the factory sector has a long way to go to regain its pre-COVID level of employment.

The purchasing price index moved lower for a third consecutive month and is now back in line with February’s level. Another diesel price increase expected next week could put renewed pressure on costs, which remain high. In all likelihood, the decline in the index merely signals a slowdown in the pace of increases. The index declined to 83.6, down from March’s recent high of 89 points, but still about 10 points above the level recorded in June 2020.  

• PMI June Report 2021
• PMI June infographic 2021

Absa announced the launch of a partnership with Daily Maverick to make the risks of the global climate crisis a bigger focus of everyday life – with practical approaches on how to address them.

Spurred by the threat of Day Zero – when it was forecast Cape Town would run out of potable water – Daily Maverick decided to tackle the climate crisis head-on. What was originally intended to be an intermittent series called Our Burning Planet has become a fully-fledged unit in the Daily Maverick editorial team, concentrating on the catastrophes that happen when bad governance and climate change collide.

From travelling to rural areas to see how weather changes have transformed food production and livelihoods, to speaking to scientists and uncovering corrupt business deals that threaten healthy ecosystems, the path was clear: help South Africans understand that we are in a climate crisis, how it affects them and how we can address the key risks for the region.

Already achieving massive impact with its investigations and reporting, the Daily Maverick team has received support from Absa, who have helped fund independent research into the key climate risks for the SADC region in 2020. The relationship with Absa has grown into greater support of the Our Burning Planet effort through an annual sponsorship and grant funding.

The response to the climate crisis is everyone’s responsibility and Daily Maverick is stepping up its response with impactful investigative journalism. Partnering with corporate South Africa is essential in supporting these initiatives that stand to make a real difference to the future of the country – and planet – for us all.

“The COVID-19 pandemic has reminded us that global challenges require global coordination and brave action.  At Absa we recognise Africa’s vulnerability to climate change, and together with like-minded media partners such as Daily Maverick and their team of dedicated journalists, we hope to stimulate public debate, shift policy and contribute to creating sustainable and value-creating solutions to some of Africa’s greatest environmental challenges,” says David Wingfield, Head of Brand at Absa Group. “We are really proud to be a media sponsor of Our Burning Planet project, to bring readers the hard-hitting, impactful journalism that Daily Maverick is known for.”

“We’re excited that our vision for reporting on the climate crisis aligns with Absa’s strategic focus. We’ll be able to invest more into our already impactful editorial efforts and help showcase Absa’s support for the cause,” says Daily Maverick CEO Styli Charalambous. Of highest priority for the Daily Maverick team is getting as many South Africans as possible to fully participate in efforts to slow down and minimise the impact of climate change. “The journalism we produce will be freely available for other publishers to use because this is bigger than any one organisation’s ambition in the space,” Charalambous adds.

The partnership with Absa is built on, and with, Daily Maverick’s well-established reputation for journalism of the highest quality that maintains editorial integrity and independence in conducting all investigations. “Editorial independence is sacrosanct in all that Daily Maverick does. We are proud to enter into a relationship with a company that recognises the value of a free and independent press and one that supports our editorial vision,” says Daily Maverick Managing Editor Jillian Green.

To stay up to date with the latest investigations, reporting and developments around the crisis, readers are invited to subscribe to the Our Burning Planet newsletter, and encouraged to be part of the conversation that shapes the future of climate crisis response in the Southern African region.

CDC Group provides $50m risk sharing facility to Absa to support lending to small businesses and households through Microfinance and Non-Bank Financial Institutions in Africa 

• CDC Group’s first risk sharing facility supporting local currency medium and longer-term lending to MFIs and NBFI
• Boosts systemic liquidity in a highly credit-constrained environment and offers financial support to small businesses and households in hard-to-reach markets.

CDC Group, the UK’s Development Finance Institution (DFI) and impact investor, today announces a new $50m risk-sharing facility with Absa Bank Limited. The commitment increases Absa’s capacity to offer financing solutions to Micro, small businesses  and households across Sub-Saharan Africa through Microfinance Institutions and Non-Bank Financial Institutions (MFI & NBFIs).

This MFI and NBFI risk sharing facility is the first of its kind for CDC – supporting lending to these institutions (through credit risk mitigation) and allowing them to better serve households and small businesses across Africa. The facility will enable Absa to deploy significant sums of capital and provide vital assistance to businesses and households in need of finance, helping them remain resilient and emerge from the crisis. Moreover, the investment forms part of CDC’s COVID-19 response and boosts systemic liquidity at a critical time when commercial lending is limited due to the economic challenges brought on by the pandemic.

This investment bolsters Absa’s strategy to promote responsible lending practices among MFIs and NBFIs in its portfolio and highlights opportunities within the financial inclusion segment – sending a positive signal to commercial banks to increase their lending to this segment of the economy where considerable funding needs remain unmet.

CDC has a long relationship with Absa, Sub-Saharan Africa’s third-largest bank, and this latest investment reinforces the partnership between both institutions. This facility builds on the existing trade finance partnership, helping to enhance access to funds in the markets, facilitate increased trading of goods and services, and deepen financial inclusion among underserved communities and individuals across Africa’s markets.

Stephen Priestley, Managing Director, Head of Financial Services, at CDC Group, said: “We are thrilled to once again partner with Absa.  This is CDC’s first risk-sharing facility that provides a local currency solution to small businesses and local households. We are confident that CDC’s counter-cyclical funding will provide much needed support to local financial institutions by diversifying their funding base and enhancing their ability to provide smaller loans to local businesses and hard-to-reach communities. CDC remains committed to ensuring that businesses and people have greater access to the financial support needed to enable them to grow and remain resilient throughout the crisis.”

Anand Naidoo, Managing Executive: Client Coverage, Absa Corporate and Investment Banking said: “We are proud to have built this partnership with CDC, which does not only bring value to the relationship, but is also aligned to our overall business strategy. This facility is another proof point in the execution of our shared growth strategy which focuses on providing finance and assisting clients to achieve sustainable economic growth in the markets where we operate. 

“The framework details the use of proceeds, the process for project evaluation and selection, the ongoing management of proceeds as well as the reporting and transparency. There is a definite trend from global investors to invest in more socially responsible projects and companies because they want to see that their funds are being invested in activities that promote sustainable economic growth.” 

Absa hosted a virtual dialogue on their Art Hotspot platform to launch the debut solo exhibition by talented amateur artist and senior Absa executive, Karin Mathebula.

Mathebula, who heads Product, Sales and Service Enablement at Absa Relationship Banking, finds her inspiration in the South African landscape. Her exhibition, entitled  “Fusion of Hues”, is a collection that walks viewers through the landscapes of her youth, showcasing nature’s most brilliant and vivid colours. Juggling a challenging corporate career, Mathebula spent just over two years completing the 17 canvasses of her first art exhibition.

With this exhibition, Mathebula explored the themes of still life, beach and mountains. “I am inspired by the environment where I grew up, the sites and smells of the Underberg region of the southern Drakenberg. Even in the most barren landscape lies beauty. If you look closely, you will always find colour and  texture, and that is the beauty of life. Sometimes there are patterns that are not recognisable, but if you look closely, you will see beauty,” she said.  

During the virtual dialogue, hosted by Absa Senior Specialist Art Curator Dr Paul Bayliss, Mathebula shared her excitement about the new journey and mentioned that it has been a life-long dream of hers to be recognised as an artist. “I have been painting all my life. It’s a place I go to for refuge, to express myself and to see things in perspective,” she said.    

Absa is committed to bringing possibility to life by celebrating visual artists of all levels and backgrounds from across the African continent. “With this exhibition, we are now also bringing Karin’s possibility to life, by recognising and celebrating her unique style and skill,” stated Bayliss.

He was introduced to Mathebula in 2019 by Arrie Rautenbach, who heads the bank’s Retail and Business banking division, whilst attending Absa’s annual Champagne Festival. Bayliss immediately recognised the potential in her work and after paying a visit to her home studio,  suggested the possibility of staging a solo exhibition.   

“I was suitably impressed. The themes that run through Karin’s artwork capture the beauty and essence of the South African landscape. Karin has a very keen eye and her distinct use of colour, texture and shapes, bring her work to life,” he said.  Despite challenges brought about by the COVID-19 pandemic, Bayliss and his team worked alongside Mathebula to curate her exhibition and realise her dream.

With the pandemic altering our lives irreversibly, the so-called “passion economy”, where people monetize individuality and creativity, is fast gaining momentum across the globe. “Whether it’s playing video games, running online yoga classes, or selling niche fashion items, people are increasingly making a living by doing the things they love. Reinvent yourself, even if it means switching to a career path that gives you what you need. It’s never too late,” stated Mathebula. 

“Absa is a purpose-led organisation and it is our wish that everyone who experiences her art will come to understand what “following your passion” is all about,” concluded Bayliss.

The virtual exhibition runs until 25 August 2021.

To visit the Absa Art Hot Spot platform, click here.

To view Mathebula’s collection on the Absa Art Hot Spot, click here.

The thirty-fifth Annual General Meeting (AGM) of ordinary shareholder held as a virtual meeting via live webcast on Friday, 4 June 2021 at 10:00.

 

•  Absa AGM full speech