Shoprite Secures $205 million SDGs loan from 2 National Banks

Shoprite, South Africa’s largest retail group, has secured $205 million in green and “sustainability-linked” loans from two big banks—Standard Bank and Rand Merchant Bank (RMB). 

Shoprite got a record-breaking R2 billion ($176 million) loan from Standard Bank, a $47 million (R800 million) sustainability-linked loan, and a R700 million ($41.7 million) green loan from RMB.

Green loans and sustainability-linked loans are given to businesses and institutions to incentivise the borrowers to achieve goals that reduce global warming. They are both slightly different from each other, though. Green loans have to be directly linked to green projects such as activities that reduce emissions of gases that cause global warming or increase energy efficiency.

 Sustainability-linked loans (SLLs) do not have to be used exclusively, if at all, for green projects. SLLs can be used for general corporate purposes as long as the company is achieving sustainability in some way to the satisfaction of the lender. 

Shoprite will use the funding to do right by the planet.

Last year, it increased the installed capacity of its solar-power system by 82% and reduced electricity consumption by 150 million kWh. It will use the funding to increase the energy efficiency and the capacity of its renewable sources of electricity. 

In that same year, it recycled 46,102 tons of cardboard from stores and distribution centres and diverted 10,241 tons of plastic waste from landfills. This year, it will ramp up its recycling efforts with the loan. 

These loans are as earth-friendly as they are groundbreaking. The R2 billion loan from Standard Bank is the bank’s biggest in the retail sector to date. The R700 million green loan is the first of its kind in the retail sector from RMB.