Mmegi: You recently participated in the National Renewable Energy Dialogue at which Vice President Ndaba Gaolathe made his inaugural remarks. Why was it important for the Bank to participate in this dialogue?
Pheko-Moshagane: The bank's participation in the National Renewable Energy Dialogue was driven by our commitment to supporting sustainable development and fostering a green economy in Botswana. This platform provided a unique opportunity to engage with key stakeholders, including policymakers, industry leaders, and community representatives, to discuss actionable strategies for advancing renewable energy solutions in the country.
Mmegi: What message did the bank impart at this dialogue and what lessons would you say you learnt from the engagement?
Pheko-Moshagane: We reaffirmed our commitment to supporting Botswana’s transition to renewable energy through innovative financial solutions, strategic partnerships, and investments aligned with our sustainability objectives. We emphasised the role of financial institutions in enabling clean energy adoption and the importance of cross-sector collaboration for scalable solutions.
Key lessons included the need for aligned policies, community education on renewable energy benefits, and adaptable financial products to address sector challenges. The dialogue reinforced our dedication to sustainable energy as a pillar for Botswana’s economic resilience and environmental sustainability.
Mmegi: Please briefly explain Absa Bank Botswana's approach to facilitating sustainable growth in the economy?
Pheko-Moshagane: Absa Bank Botswana facilitates sustainable growth in the economy by integrating sustainability into its core business strategy. The bank offers financial solutions that are aligned to the economic growth agenda of the nation. In the recent past Absa published a sustainable finance issuance framework and listed sustainable bonds under its Medium Note Programme.
Through a six-year facility amounting to ZAR400million Absa also partnered with Norsad to utilise Sustainable Linked Funding through impact investing. These are just a few examples that demonstrate our approach to facilitating sustainable growth in the economy
Mmegi: Botswana's economy is still powered for the most part by fossil fuels and as a middle-income country, it may be more difficult to access funding for the green transition. How is Absa approaching these challenges to partner with the private sector in moving the needle?
Pheko-Moshagane: Absa Bank Botswana acknowledges the challenges of transitioning from a fossil fuel-reliant economy, particularly in a middle-income context where accessing green funding can be complex. The bank addresses these challenges by leveraging its sustainable finance expertise to develop tailored solutions that enable the private sector to embrace green initiatives. As part of a broader Pan African Bank we also have the capacity to leverage on expertise that is across the group to provide better solutions to our clients. Additionally, we work with our customers and as they transition to green solutions. Over the years we have supported clients through funding their solar projects.
Mmegi: Absa Bank Botswana floated the country's first sustainable bond last December. Take us briefly through the journey of pioneering a sustainable listing in the market. What challenges did you encounter and how did you resolve them?
Pheko-Moshagane: Absa Bank Botswana's first sustainable bond was a pioneering effort which started over three years ago with the Board setting out the desired target to be achieved within a set timeframe when it came to commitment on ESG. With the tone set from the top, this was followed by the determination of ESG risks and opportunities which are in alignment with the banks long-term strategic value creation for investors and advantage for the community we operate in. The development and integration into the business of a comprehensive sustainable financing framework followed which provided guidelines/principles that the bank would be guided by when listing bonds.
With any first to market initiatives, there are bound to be challenges. The bank engaged with all relevant stakeholders including but not limited to investors, Bank of Botswana and the Botswana Stock Exchange on its pathway to listing the inaugural sustainable bond. This was done to build trust and alignment in the overall objective of the bond from the relevant parties involved. Moreover, the bank engaged international expertise during the journey to list the bond on the domestic exchange to ensure the highest standards were adhered to.
Mmegi: What would you say has been the market's response to the first notes you have issued from the green bond programme?
Pheko-Moshagane: Being a pioneer in the market has enabled us to truly influence the direction that the market is taking in the area of sustainable financing. The programme has been met with keen interest and optimism, reflecting a growing trend in sustainable financing. This has led to other players also following suit in adopting similar initiatives. The resounding market response is further epitomised by the tap issuance that happened in February of this year emanating from the desire of investors to invest in the bond.
Mmegi: At this point, what quantum of notes has been issued from the programme and what notes or funding are you looking at issuing in the year to come?
Pheko-Moshagane: Under our note programme, the bank has successfully listed one sustainability bond to date with a value of P80m. Moving forward, in line with our strategic focus of being the primary sustainable financing partner of our clients, we aim to expand our portfolio by issuing more green, social, and sustainability bonds, further advancing our commitment to sustainable financing.
Mmegi: In February, Absa partnered with Stanbic Bank Botswana and Norsad in a ZAR680m sustainable funding deal. What does this funding aim to achieve specifically and please speak to the role that partnerships play in financing sustainable growth in the local economy.
Pheko-Moshagane: The ZAR680 million sustainable funding deal aims to drive sustainable economic growth by supporting projects and businesses aligned with environmental, social, and governance (ESG) principles. This funding promotes investments that create long-term value while addressing pressing sustainability challenges, such as climate resilience, social upliftment, and responsible resource management.
Partnerships like this are pivotal in financing sustainable growth, as they pool expertise, resources, and networks to scale impact. By collaborating with like-minded institutions, Absa ensures that financing solutions are robust, accessible, and aligned with the broader goals of advancing Botswana's sustainable development agenda.
Mmegi: What can Batswana look forward to from Absa Bank Botswana next year in terms of the bank partnering with them to achieve their aspirations?
Pheko-Moshagane: We remain a strategic partner for government and continue to support the initiatives that benefit Batswana. Our outlook is to provide relevant customer-centric solutions that meet and exceeds customer expectations. Our long-term view is to remain a trusted partner that all our key stakeholders can count on as we forge ahead in empowering the future of the country.
Mmegi: Your final words for our readers?
Pheko-Moshagane: We have the financial expertise and resources to play a significant role in the country to drive the development of renewable energy. Absa Botswana can leverage from being part of a Pan African Financial Institution to bring expertise, learnings and resources from across the continent to Botswana.
