Johannesburg, South Africa, June 30, 2011
– IFC, a member of the World Bank Group, is mobilizing an equivalent of up to 50 million Euros in South African Rand financing for Mercantile Bank to help it increase its lending to smaller businesses, including financing energy efficient and renewable energy projects to reduce CO2 emissions and energy costs.
The investment consists of a loan of up to
48.4 million from IFC’s own account and a second loan of up to
1.6 million from the World Bank-administered Clean Technology Fund. The investment will help South African SMEs more easily obtain the funds they need to grow, supporting the long-term development of the sector. IFC’s financing in South African Rand will reduce risk for the smaller businesses by enabling access to
long-term local currency funding to spur economic development.
Dave Brown, CEO of Mercantile Bank said, “This partnership funding will enhance our capacity to grow our presence in supporting the development of private business in South Africa and open up opportunities to finance energy efficient projects"
Thierry Tanoh, IFC’s Vice President for Sub-Saharan Africa, said, “IFC’s investment in Mercantile Bank highlights our ongoing commitment to the small and medium-sized business sector in South Africa and across the continent. Our partnership with Mercantile Bank will help more enterprising Africans to obtain loans to expand their operations and to finance energy efficient projects.”
Supporting the growth of small and medium sized enterprises is a top strategic priority of IFC’s work in Africa, where smaller businesses employ the bulk of the working population but often struggle to obtain long-term financing.
The investment in Mercantile will also support South Africa’s efforts to reduce its CO2 emissions, by making funds available to businesses seeking to adapt renewable energy or more energy efficient technologies.
In fiscal year 2010, more than $1.64 billion of IFC’s global investments went to finance renewable energy, energy efficiency, and other climate related business, up from $1.03 billion in fiscal year 2009.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit