South Africa's FirstRand secures $300mn DFI facility to boost renewable energy financing

Germany’s development finance institution DEG, France’s Proparco and the Netherlands’ FMO have jointly provided a $300mn financing facility to FirstRand (JSE:FSR) to support renewable energy investment in South Africa.

The facility is intended to expand FirstRand’s capacity to finance private-sector renewable power projects, as well as associated grid and energy-storage investments, supporting South Africa’s transition away from coal while maintaining energy security. Financial terms such as tenor and pricing were not disclosed.

FirstRand is South Africa’s largest banking group by market capitalisation, with operations spanning retail, commercial and investment banking through brands including Rand Merchant Bank, FNB and WesBank. The group has increasingly positioned itself as a key intermediary for climate finance, channelling capital into utility-scale and commercial-and-industrial renewable projects.

The funding aligns with South Africa’s Just Energy Transition Partnership, under which the country has secured pledges of more than $8.5bn from international partners to support the decarbonisation of its power sector while mitigating social and economic impacts, particularly in coal-dependent regions.

South Africa remains heavily reliant on coal, which accounts for around 80% of electricity generation. Chronic power shortages, combined with regulatory reforms that lifted licensing thresholds for embedded generation in 2021–22, have accelerated demand for privately financed renewable capacity, increasing the role of commercial banks in project funding.

Development finance institutions such as DEG, Proparco and FMO have sought to use credit lines and other blended-finance instruments to crowd in private capital for renewables, transmission upgrades and storage.

For FirstRand, the facility is expected to strengthen its pipeline of bankable clean-energy projects as corporate and utility clients scale investment in response to power supply constraints and climate transition pressures.