Standard Bank provides facility to combat climate change and improve the lives of rural communities

Standard Bank has recently finalised an agreement to provide financial support to The African Stove Company (TASC) for what is believed to be South Africa’s first carbon credit project designed to combat climate change while simultaneously generating positive social impacts in rural areas.

This funding facility is aimed at supporting TASC’s socially-oriented initiatives. TASC generates revenue by selling carbon credits, which are issued based on emission reductions resulting from rural communities using approximately 680,000 cookstoves provided by the company to South African communities, as explained by Lawrence Cole-Morgan, Lead Carbon Credit Trading at Standard Bank.

These efficient stoves substantially reduce the wood required as fuel, resulting in immediate benefits by lowering greenhouse gas emissions, particularly carbon dioxide. This helps in the fight against climate change and contributes to the preservation of biodiversity.

Moreover, the communities benefiting from these stoves experience reduced cooking fuel costs and spend less time gathering fuel from their surroundings. The cleaner burning stoves also offer health benefits and eliminate the dangers associated with traditional open-fire cooking methods.

TASC generates carbon credits by reducing carbon emissions through the use of these cookstoves. The distribution of these stoves is funded by selling carbon credits to companies looking to combat climate change and offset their emissions. However, these credit sales can occur months or even years after a project is established, requiring upfront capital to execute the project.

To support TASC’s goal of distributing 750,000 efficient cookstoves to rural communities, Standard Bank is providing financing based on the future sale price of the carbon credits.

George Kotsovos, Executive: Energy & Infrastructure Finance at Standard Bank, notes that this deal demonstrates the bank’s ability to finance against carbon credits as a commodity, showcasing its competencies in providing sustainable green and social loans in Africa. Standard Bank’s African presence and its reputation for offering tailored solutions are competitive advantages that provide clients with access to various markets and local expertise.

Shelley Estcourt, TASC CEO Africa, emphasises the importance of carbon credits in enabling companies to offset their carbon emissions and contribute to a more sustainable future. TASC is pleased to have Standard Bank as a partner in the fight against climate change and the improvement of rural communities’ lives.