Stanbic Bank Botswana’s Head of Business and Commercial Banking, Lesego Osman
Acknowledges difficulty of transitioning from traditional industries
Stanbic Bank Botswana is set to prioritise green financing, aiming to expand its funding portfolio with projects that generate meaningful social impact and create employment opportunities.
Lesego Osman, Head of Business and Commercial Banking, stressed the importance of skills development to support this transition. He highlighted the bank's ongoing dialogues with entrepreneurs and strategic partnerships aimed at enhancing capacities for sustainable business practices.
Osman made these remarks recently during the groundbreaking ceremony for the Kwenantle Farmers Solar and Irrigation Project, where the bank provided financing of P27 million.
A lack of skills and capacity can significantly hamper ESG practices in several ways. Many workers in traditional industries may not possess the skills required for jobs in emerging ESG sectors. For instance, renewable energy jobs often require expertise in engineering, data analysis, and technology that may not be part of the skill set in sectors like coal mining or oil extraction.
“We will continue to have, seminars and thought leadership processes. We even go so far as to look for training opportunities and where we can partner with entities that have that expertise. We are deliberate about bringing our entrepreneurs together with those entities.”
For the Kwenantle project, Stanbic Bank partnered with Agri-3, a Netherlands-based fund. Osman noted that the bank's role extends beyond merely providing funding; it involves fostering a holistic approach to supporting sustainable development.
“We also need to create the pathway that enables businesses to transition to greener,” he said adding that this means different things in different industries.
“We can also do other things. Whether it's conservation or entities in the tourism space that we want to assist with ESG initiatives that are going to aid conservation, we will equally look for opportunities where we can partner.”
“For us, this is twofold in that it's not only providing green funding but also creating the right sort of social impact that we want to see, which is creating employment for Botswana and entities in this community.”
The initiative aims to expand irrigated land to 839 hectares with the installation of 29 pivots. This project is expected to generate annual energy savings of approximately P1.6 million and increase permanent employment from 104 to 154 positions.
In supporting these initiatives, Osman referenced Botswana's legislative framework related to climate change, including its commitments under the Paris Agreement. While the government currently lacks a regulatory mechanism specifically for environmental, social, and governance (ESG) standards, it does have the Environment Act and various climate change policies that contribute to ESG efforts. Additionally, elements of ESG are increasingly being integrated into existing legal frameworks in the country.
“There will be an increased ask for financiers like ourselves to make sure that we're supporting those initiatives,” Osman said acknowledging that green projects often cannot match the immediate employment levels of traditional industries like coal mining.
ESG initiatives often focus on sustainability and social responsibility, but they can sometimes struggle to create jobs at the same scale as traditional, "dirty" industries. Many ESG initiatives, like renewable energy projects (e.g., solar or wind farms), often require significant upfront investment in technology and infrastructure, which can limit job creation compared to labor-intensive industries like fossil fuels or manufacturing.
Consider the coal industry versus the solar energy sector. Coal mining can employ thousands of workers in direct extraction roles. In contrast, a solar farm may require fewer workers for installation and maintenance. While the solar sector can be expanding and offers growth potential, it might not match the immediate job numbers generated by traditional coal mining, especially in regions where coal has been a dominant employer. Transitioning those workers to new jobs in solar can be a lengthy process, and there may be significant challenges in providing the necessary training and support.
A key issue that generated attention recently was how the West was channeling less capital towards non-friendly ESG investments such as coal mining. More than 200 mainly Western financiers reportedly announced policies restricting investments in coal mining or coal-fired power plants. Coal plays a significant role in Botswana's electricity generation, with Botswana Oil estimating the country's coal reserves to exceed 200 billion tonnes. This abundance positions coal as a crucial component of the nation’s energy landscape.
“What we're saying is if you take Botswana as a country, there's still aspects that may not be as clean and still has some way to go,” Osman said.
Given this context, the bank cannot completely withdraw from financing other sectors.
“But what we're saying is, over time, we would like to shift our funding strategy towards projects that are sustainable and environmentally friendly.”
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