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Financing sustainable development

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Adequate, appropriate finance is crucial for Africa’s sustainable development. Both the UN’s Sustainable Development Goals (SDGs) as well as the environmental, social and governance (ESG) objectives play an increasingly important role in financing transactions, international as well as domestic. Lenders and investors may require that the recipient of their funds complies with agreed ESG objectives or that such funds are applied in furtherance of particular SDGs. They may require more detailed identification and mitigation of environmental and social impacts. The terms of the loans may require or incentivise borrowers to improve the sustainability of their business operations.

As sustainable funding continues to gain momentum, our global team of finance lawyers can advise on all aspects of this sector, including financial services regulations, environmental and social standards compliance, and equity and debt investments such as sustainability-linked loans, green bonds and green loans. Our local and cross-border lawyers have extensive experience structuring financing for renewable energy projects and other green and social infrastructure, as well as structuring sustainability-linked financing for corporate borrowers.

Increasingly, financial institutions and investors will need to assess, monitor and disclose the sustainability of their investments. Regulatory intervention is increasing in some markets, while voluntary initiatives are being adopted in others. This also presents an opportunity, within the appropriate frameworks, for the development of new products and services, driving value and furthering SDGs and ESG objectives. The SDGs and ESG objectives have moved rapidly from the margins to the very heart of decision making.

CMS South Africa, as an African law firm, believes in the importance of Africa's sustainable development and the role that SDGs and the ESG objectives can apply towards this goal. We have established a dedicated team of lawyers covering Sub-Saharan Africa and supported by the global CMS network, who focus on sustainable development financing, not just as a business opportunity but out of conviction. The type of transactions that our team supports include:

  • Agriculture funding
  • Blended finance funds and structures involving
    • Agriculture
    • Education
    • Energy
    • Health
    • Housing 
    • Infrastructure
  • Project finance
    • Infrastructure 
    • Renewable energy
  • Trade and export financing

Our clients include banks, Institutional and financial investors, corporates, DFIs, guarantee funds, credit insurers, national and international development bodies and institutions and governments and public authorities. We assist our clients with structuring transactions from a legal, tax and regulatory perspective and can support a broad variety of financing transactions (also under English law) such as:

  • Setting up of blended finance funds and structures
  • Loan transactions 
  • Capital markets transactions
  • ESG and SDG linked financial instruments
  • Derivatives
  • Guarantee and insurance facilities
  • Collateral structures

CMS has developed a notable profile and market share in South Africa's banking space. The firm represents a range of borrowers and lenders, including major South African banks and international development finance institutions. The group possesses expertise covering private placements and preference shares, project financing and debt restructuring, among other matters. It has additional capabilities on which the South African practice can draw, from across its network of global offices.

Chambers & Partners, Banking & Finance, South Africa, 2023

Strengths include "handled complex matters with speedy turnaround, and with a good balance between the legal versus the pragmatic".

Chambers & Partners, Banking & Finance, South Africa, 2023

Strengths include "were able to conclude the requisite transactions in record time, largely due to the very strong service levels of CMS".

Chambers & Partners, Banking & Finance, South Africa, 2023

They are very knowledgeable, efficient and professional. They specialise in corporate, commercial and banking law and have an excellent track record.

Chambers & Partners, South Africa, 2024

The firm handled complex matters with speedy turnaround, and with a good balance between the legal versus the pragmatic.

Chambers & Partners, South Africa, 2024

We were able to conclude the requisite transactions in record time, largely due to the very strong service levels of CMS.

Chambers & Partners, South Africa, 2024

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