Best Arranger of African Loans – Standard Chartered
In an extremely challenging year, Standard Chartered showed its strength and leadership in continuing to find liquidity for its clients in the African loans market, lead arranging financings for some 18 borrowers, almost three times as many as the bank’s nearest competitor.
“There’s a lot of transactions that can be done in difficult markets and we were able to provide financing to our clients that they maybe wouldn’t have been able to achieve elsewhere,” says Ben Constable, head of loan syndications for Africa at Standard Chartered in London. “What I’m most proud of last year was the way the bank supported our clients on some of the smaller deals, getting them over the line when others in the market took a bit of a step back.”
But while supporting clients through the crisis was important, Standard Chartered has also been working to develop environmental, social and governance (ESG) objectives on the continent.
The bank has a dedicated function that focuses on sustainable finance and provides support to help borrowers either embed ESG targets into their financing or build the kind of ESG frameworks that are now common in Europe. “We’re working to help clients put in place holistic frameworks around the kind of projects that can be classified as meeting the UN Sustainable Development Goals or to link the progress they make towards ESG targets to the terms of their financing,” says Constable.
“For us, sustainability is embedded in everything we do in the origination process, right down to our internal systems to track eligibility so it’s really important for us to help our clients in Africa access the sustainable finance market because we see this as an increasingly important aspect for investors when looking at opportunities.”
He adds: “Helping our African clients articulate the strong development impact of their projects or develop the right messaging around their ESG targets so that we can provide comfort to investors around implementation and monitoring is very important to us”
However, he says that the approach for Africa needs to be tailored and based on each market’s own development objectives.
“Helping clients set meaningful and ambitious targets that work for them is important and this might not necessarily be the same as what might work for a client in Europe, for example,” says Constable. “A one size fits all approach is unlikely to work.”
With a long history on the continent and a presence on the ground in 16 markets, it is well-placed to guide clients through the process. “Identifying the broader benefits to our clients from investing in greater ESG monitoring is key,” says Constable. “What we can do is look at the use of proceeds and find the development angles that make sense,” he adds. “That is something which we are really keen to drive forward – it links very well into our desires as a stakeholder in these countries to help with development and it provides a fresh stream of capital into the countries in which we operate.”
One of the larger deals to emerge in 2020, before the disruption, was a $1.64bn loan for Tanzania to finance a section of an east African railway expected to provide an efficient link for passengers and freight from the capital city of Dodoma to the port city of Dar Es Salaam. Standard Chartered coordinated what was an innovative deal involving export credit agencies from multiple countries, with EKF, the Danish ECA, fronting the transaction on behalf of the others and the deal also included commercial tranches extended by commercial banks and four DFIs.
“It meant we were able to achieve a much higher overall coverage percentage of the transaction than we would have expected when we initially looked at the project,” says Constable. “It’s not the first time the structure has been used but it’s the first time it’s been used on this scale in Africa.” GC