Fortress REIT to scale up its renewable energy outputs
South Africa, Cape Town: A South African hybrid fund Fortress REIT (Real Estate Investments) has launched a total of $61.5 M sustainability-linked bonds.
Image source: ESI Africa
South Africa, Cape Town: A South African hybrid fund Fortress REIT (Real Estate Investments) has launched a total of $61.5 M sustainability-linked bonds.
The bonds will be used to scale up its renewable energy outputs and deliver more solar energy to the national grid.
The Johannesburg Stock Exchange has granted Fortress the listing of a 3-year sustainability-linked bond of $33.8 M and a 5-year sustainability-linked note of $27.6 M.
Although the bonds do not have specific use-of-proceed requirements, the funds will assist Fortress with the continued installation and increase of solar energy in South Africa, across its retail and logistics portfolios. This will allow Fortress’ real estate assets to meet its targets for solar energy, facilitate a reduction in reliance on utilities, reduce its carbon footprint and contribute to mitigating climate change.
The key feature of this note is the linking of Fortress’ cost of funding to pre-agreed sustainability performance targets which will unlock a lower cost of funding, should all these targets be met.
Ian Vorster, CFO of Fortress REIT, said: “The target measurement dates for the 5-year note are 30 June 2022 and 30 June 2024. Fortress has committed to increasing its renewable energy installations and megawatt outputs.
“The renewable energy target will be achieved through an increase in solar energy installed measured in megawatt-peak (MWp) with respect to the South African portion of its portfolio. The target is for a 2.2M Wp increase at the first target date in June 2022 and then a further 3.6M Wp in June 2024 resulting in a cumulative 5.8M Wp installation.”
Source: ESI Africa
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