Pan African property investor Lango Real Estate has established a sustainability-linked financing package that will support its sustainability strategy in the long term, and Rand Merchant Bank (RMB) has won the role of sole sustainability advisor and coordinator for it.
The partnership has seen the establishment of a sustainable finance framework (SFF) that will reportedly consider the use of proceed loans and sustainability-linked loans (SLL).
RMB, as sustainability coordinator, has implemented a $325 million SLL package which it has jointly funded with banking giant Standard Bank, which, according to Lango, makes it one of the largest SLL loans implemented on the continent.
Lango holds a portfolio of assets worth over $600 million in parts of the continent, including Ghana, Nigeria, Zambia and Angola, and says the development of the SFF marks a significant milestone in its sustainability journey as it merges the firm’s financial strategy and sustainability goals while also supporting transparency of reporting.
“The implementation of a sustainable finance framework not only allows Lango to take a leading role in furthering the sustainability agenda in Africa, but also allows Lango the opportunity to credibly tap the impact-related financial markets internationally in order to secure additional growth capital,” says Lango CEO Thomas Reilly.
“The framework tangibly demonstrates our commitment to sustainability, not only to our stakeholders but also to the various communities across the continent in which we operate,” he adds.
“We have worked together with RMB to develop a SFF that enables Lango to repeatedly access the sustainable finance market in an efficient manner, thereby facilitating further growth, value creation and the positive impact of the business.”
Lango was the brainchild of JSE-listed property giant Growthpoint, together with Ninety One (when it was still known as Investec Asset Management).
Among the key performance indicators RMB and Lango have identified to promote the real estate firm’s decarbonisation and overarching sustainability goals are: increasing reliance on renewable energy sources, green-certifying buildings, and improving gender diversity.
Over the period of the loan, Lango says it looks to have installed enough renewable energy to power over 2 400 homes, while aiming to achieve 20% improvements in energy, water and embodied energy in most of its buildings by 2025.
For RMB, Lango’s direction in sustainable finance will go a long way in transforming the real estate sector on the African continent.
“Lango has cemented its commitment to achieving ambitious sustainability goals, with the aim of ensuring all their assets are managed through the lens of corporate responsibility, accountability, and sustainability,” says Reinhard Winsauer, head of RMB’s broader Africa Real Estate Investment banking division.
“With a growing sustainability agenda in Africa, Lango’s commitment and utilisation of sustainable finance as a leading African real estate organisation will prove transformative for the sector, while ensuring a meaningful contribution to the continent’s sustainability goals.”
In terms of how the partnership aligns with the bank’s own sustainability goals, RMB notes that the funding package will help bite a big chunk out of its goal to facilitate over R200 billion in sustainable finance.
Listen to Lango Real Estate CEO Thomas Reilly speaking to Suren Naidoo on The Property Pod about property investor’s expansion (or read the transcript):