Harmony unveils $400m and R4bn in lending facilities linked to renewable energy targets

Solar panels

HARMONY Gold said today it had agreed a $400m and R4bn finance package for its previously stated renewable energy plans that will take the group to net carbon zero by 2045.

ABSA Bank led a syndicate of lenders part of which involves a R1.5bn green loan, ring-fenced for Phase 2 of Harmony’s renewable energy roll-out.

While phase one is to build 30MW of solar power at its Free State mines, phase two more ambitiously reaches for 137MW of renewable energy at the firm’s longer-life mines. Some R500m in annual savings has been targeted.

Commenting on the green loan today, Harmony said the loan’s cash flow profile was designed to match the expected cash flow of the solar PV build and energy savings Harmony has targeted. “Phase 2 of the solar PV project is currently in the feasibility stage and we are working on obtaining the necessary permits and licenses”, the company said.

In addition, there are sustainability linked loans agreed with the syndicate that consist of a R1.5bn revolving credit facility (RCF) as well as a $300m RCF and a $100m term loan. These loans align with various ESG and sustainable development targets such as reducing water consumption and a renewable energy mix of 20% of total by 2025.

Harmony has a phase three in its renewable energy plans which it said today was in planning stage and “progressing as anticipated”.

Peter Steenkamp, CEO of Harmony said the ESG-linked lending facilities would “… de-risk the business and deliver many socio-economic benefits. ‘Mining with purpose’ is ensuring that our investors and other stakeholders continue to derive value and positive returns in a global climate of energy uncertainty”.