At a Glance
- Absa Mauritius targets $666 million in green loans to support 2030 climate goals.
- Green finance surges as Mauritius battles flooding, drought, and climate-linked tourism risks.
- Proparco backs Absa with $75 million to scale renewable energy and ESG lending.
Absa Bank (Mauritius) Limited, a major subsidiary of South Africa’s Absa Group, plans to nearly quadruple its green loan portfolio to MUR30 billion ($666 million) by 2030.
This strategic move supports Mauritius’ aggressive climate agenda aimed at reducing greenhouse gas emissions by 40 percent within the decade.
Currently, Absa Mauritius holds MUR8 billion ($177.6 million) in green loans, up from MUR4.1 billion ($91 million) just a year ago, underscoring a rapid scale-up in sustainable project financing.
Nathan Carr, Chief of Staff and Head of Legal and Sustainability at Absa Mauritius, emphasized the vital role banks must play in driving environmental, social, and governance (ESG) commitments across the region.
Mauritius’ climate risks drive surge in renewable energy and green loans
Though Mauritius contributes a mere 0.01 percent to global emissions, it faces escalating climate challenges including flooding, drought, and coral bleaching.
These environmental threats pose significant risks to the island’s economy, especially the tourism and hospitality sectors, which constitute 16 percent of Absa’s corporate loan book.
The government has outlined a $6.5 billion funding requirement to meet its climate targets, fueling a surge in demand for climate finance and renewable energy investment.
Absa Mauritius recently secured $75 million from Proparco, a French development finance institution, to back green energy, infrastructure, and waste management projects critical to the island’s 2030 climate ambitions.
Growing pipeline of sustainable projects and market expansion
Mauritius’ status as an international financial hub is catalyzing growth in sustainable finance.
According to the Bank of Mauritius, banks’ exposure to sustainable projects has more than doubled to MUR10.2 billion ($226.3 million) as of June 2024, with green loan applications increasing 80 percent year-on-year.
Absa Group, with $90 billion in assets across 12 African countries, views Mauritius as a key center for expanding its green finance initiatives.
The local unit has scaled its sustainability team from one to five staff members within a year to manage the growing pipeline of renewable energy projects like wind farms and solar power installations.
Led by CEO Ravin Dajee, Absa Mauritius aims to capitalize on the rising momentum of climate-conscious investments, reinforcing its position as a regional leader in sustainable banking.
