Latest reports suggest that 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.
The lender, which is 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.
“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.
Mauritius has since 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.
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.
“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.
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.
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.
Story was adapted from Bloomberg.
