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(Bloomberg) — Absa Mauritius plans to nearly quadruple funding for green projects by 2030 to support the island nation’s emissions reduction goals and efforts to mitigate climate change.
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The lender, a unit of South Africa’s third-largest bank by assets, Absa Group Ltd., intends to increase green loans to 30 billion rupees ($664 million) from 8 billion rupees at the end of last year.
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“There is a sustainable role for banks to play a proactive role from an environmental, social and governance perspective,” Nathan Carr, chief of staff and head of legal and sustainability for Absa Mauritius and Seychelles, said.
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Mauritius has set an ambitious target to cut greenhouse gas emissions by 40% by 2030 to curb the effects of global warming. Although the island accounts for just 0.01% of global emissions, it has faced rising incidences of flooding, drought and coral bleaching — threatening both marine life and its vital tourism industry.
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About 16% of “our book in the corporate investment space is with the hospitality sector and resorts” that are directly impacted by beach erosion, coral bleaching and extreme weather, Carr said.
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The government’s plan, which will require an estimated $6.5 billion in funding, and Mauritius’ stature as an international financial center have fueled a boom in green financing.
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“Whether it’s carbon accounting or renewable energy projects such as wind turbines and solar farms, there’s growing demand and there’s a growing pipeline,” Carr said.
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Banks’ exposure to sustainable projects more than doubled in two years to 10.2 billion rupees by June 2024 and loan applications for green projects have surged by 80% annually, according to Bank of Mauritius.
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Absa’s own allocation for such projects climbed to 8 billion rupees by the end of 2024 from 4.1 billion rupees a year earlier and it has increased the number of people focused on sustainability to five from one.
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—With assistance from Kamlesh Bhuckory.
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English (US)