Absa Corporate and Investment Banking (Absa CIB) and emerging market mining specialist, Harmony Gold Mining Company Limited (Harmony), have finalised a new syndicated, multi-tranche, multi-currency, sustainability-linked and green use of proceeds term debt package (the “New Syndicated Facilities”). This is a landmark and market leading transaction. Not only is it one of the largest completely sustainability-linked debt packages on the African continent, it is also the largest in the sector over the last 12 months.
In a transaction valued at approximately R10.40bn, Absa CIB were mandated by Harmony as Joint Global Co-ordinator, Bookrunner, Sustainability Co-ordinator, Mandated Lead Arranger, Facility Agent and Sustainability Agent on the New Syndicated Facilities.
“This is a ground-breaking transaction in terms of Sustainable Finance in the South African market and will set the benchmark for future deals,” says Tawanda Madondo, Principal: Resources and Energy for Absa CIB.
Madondo adds, “The Harmony relationship is a key one for us. This transaction aligns with our core strategic goal of being a partner of choice by going beyond debt finance to provide a solution which is integrated into their ESG and Sustainability goals.”
Having invested significantly in its Sustainable Finance and ESG value proposition, Absa CIB were able to offer a complete market leading ESG solution to Harmony following market best practice.
The New Syndicated Facilities comprised:
- A green use of proceeds R1.50bn term loan
- A sustainability linked $100mn term loan
- A sustainability linked R2.50bn revolving credit facility
- A sustainability linked $300mn revolving credit facility
The transaction will contractually and commercially incentivise Harmony to operate in a manner that will reduce its overall carbon footprint. Contractual KPIs include setting targets for greenhouse gas emissions reduction, renewable energy consumption increase and water consumption reduction.
“Absa CIB has been supporting our growth journey by providing an increasing and sizeable amount of balance sheet support to the business over time. After a robust RFP process, this again resulted in the selection of Absa CIB as a Global Coordinator and Bookrunner on the New Syndicated Facilities. Absa CIB also provides many other services to us, and is a trusted partner of Harmony,” says Herman Perry, CFO/Executive: Treasury, Harmony Gold Mining Company Limited.
The deal also supports Harmony’s strategic goal of reducing costs by providing the necessary funding to finance the construction of its own solar PV plant allowing for self-generation of cheaper electricity.
Furthermore, this deal will significantly improve Harmony’s general corporate flexibility to further support its growth strategy and maintain operations.
Madondo concludes: “Absa CIB is proud to be championing a green-focused financing solution for our clients and to improve the overall well-being of our planet. The debt solution provided to Harmony is testament to Absa CIB’s commitment to pioneering a greener future for all.”