Being a green bank that is active in renewable energy has always been one of Nedbank’s strategic initiatives.
“It started by looking at ourselves how we were functioning on a sustainable level”, says Mark Boshoff, Head of Strategic Initiatives at Nedbank Business Banking. In an interview on the television programme, Nation in Conversation, hosted by Galileo Capital CEO Theo Vorster, Boshoff said that more and more of their clients were telling them that they wanted to become like Nedbank and follow the same philosophy of sustainability. It reached a point where Nedbank decided it was time to pass on to their clients what they had learned over the years.
“Our CEO, Mike Brown, put a challenge to everybody in the bank to start lending money differently as Nedbank’s share in stopping global warming and the carbon footprint”, Boshoff said. “What transpired was that we set aside a certain amount of money for lending to green, sustainable solutions. We now have a business banking offering for our clients to finance renewable energy projects. It pertains mainly to businesses in agricultural and commercial applications, where the client will either strive to become independent or less dependent on carbon and fossil fuels. The offering works from the premise that the savings one makes from applying renewable energy equipment will be matched as far as possible to the repayment of the renewable energy financing facility. It is a very simple concept and philosophy.”
Integral to Nedbank’s offering, they strongly recommend that its clients undergo energy audits. Energy audits reduce energy cost, encouraging the client to replace energy guzzlers with more efficient equipment. Reducing energy consumption also means needing less renewable energy. Whereas the repayment period is three to five years on normal banking products, the payback period on renewable energy will be up to ten years. Nedbank will also look at it as a portfolio product, taking into consideration the client’s average rate on a current account and asset-based finance to offer a favourable repayment rate.
“The beauty of our offering”, Boshoff explained, “lies in the cash flow modelling. We also have a look at what incentives government is giving the client, such as tax and Eskom incentives that would affect cash flow, on which basis the client can look at various ways of doing business.”
Boshoff continued that having done a lot of research on the topic himself, he could say in all honesty that anybody using energy could benefit from Nedbank’s offering , from the home owner right through to large industrial clients. The extent to which they could become independent may vary. “If we take a huge energy consumer, for example an aluminum smelter, I don’t think you will ever get away from using the current Eskom grid, but you could run your administration buildings and other equipment on it. We are seeing it in filling stations where they use the space over the petrol pumps, and with wine farmers converting their cellar to accommodate solar panels. Wherever you look and go in South Africa, you will see solar panels, windturbines and solar collectors. The applications are just unlimited.”
Looking ahead, Boshoff said, Nedbank believed that it would be the leading bank in financing renewal energy. The bank is looking at how it could finance the entire value chain, assisting the suppliers of equipment, the engineers involved and the energy auditors. “We could possibly spring up a whole new small and medium enterprise business opportunity where smaller companies can get involved in a sustainable manner.”
Boshoff’s advice to potential clients interested in Nedbank’s renewable energy offering is that the best way to start is to speak to their local business banker. Business Banking has more than 200 well-trained sales people all across the country, even in the smaller regions, who will be able to provide assistance very quickly. Clients who have done their research will probably know exactly which supplier, engineer or consultant they want to use. If not, the Nedbank team will put them in touch with somebody that will independently guide them through the process to make sure that they get the best value for their money.
The Nation in Conversation interview formed part of a series of televised discussions on issues affecting agriculture and society in general, amongst others environmental challenges, protection of scarce resources and access to alternative energy sources.
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View the full interview on YouTube:
Enquiries / Requests for interviews:
Ronel Botha – Brand Republic (producer)
011 465 0099 / 082 875 3914
Background note to Nation in Conversation
The Nation in Conversation concept was initiated by Senwes three years ago. Following the success of a series of discussion forums at the annual Nampo Harvest Day agricultural trade exhibition, Nation in Conversation has now been extended into a thirteen-part dialogue series broadcast on Business Day Television, Soweto TV and KykNet from September to December 2015.
Francois Strydom, Managing Director of Senwes, says the discussions are focused on bringing important matters in the agricultural sector to the attention of a wider audience, creating greater cohesiveness, and ensuring a solution-driven approach towards a new dispensation in agriculture. “What happens in agriculture impacts on our nation’s well-being – our ability to access quality and affordable food.”
Nation in Conversation partners: Senwes, AFGRI, Fort Knox, Hinterland, NWK, Nedbank and Monsanto.