This is the text of a speech by Mayor Patricia de Lille at the JSE today:
South Africa signed the COP21 Paris agreement which commits our country to deal with the impacts of climate change.
But as we know with all national leader agreements, they are very good at signing agreements and then also breaking those agreements. Trump is a prime example.
The onus is on cities to mitigate the impact of climate change.
It is mayors from around the world who are struggling to get the necessary funding that can help us to deal with climate change.
For instance, there is a Green Fund that was established in Paris, yet it is almost impossible to get the funds because only national governments are permitted to access them directly.
We have tried for six months to access those funds to very little avail.
But we are not relying on getting money from the fund any time soon because of the bureaucracy and red tape involved in accessing it.
As the City of Cape Town, we have to continue to deliver good quality services to our residents and maintain infrastructure from the income we derive from residents.
But we also have no choice but to mitigate the effects of climate change or else there will be no cities left.
This is why we overlay all our decisions with the impact on climate change. It is in this context that City of Cape Town opted to approach the market.
I would like to thank the Johannesburg Stock Exchange (JSE) for partnering with us for this initiative.
I would also like to thank all the investors who have shown confidence in us by investing in the City of Cape Town.
The projects funded by the green bond were a mix of adaptation and mitigation initiatives, all of which are aligned with the City’s Climate Change Strategy. The projects included:
· procurement of electric buses
· energy efficiency in buildings
· water management initiatives (which includes water meter installations and replacements, water pressure management, and upgrade of reservoirs)
· sewerage effluent treatment
· rehabilitation and protection of coastal structures
When we took our bond to the market in July, within two hours 31 investors made offers totalling R4,89 billion in response the R1 billion that was being sold.
This overwhelmingly positive response form the market demonstrated the great appetite among investors to invest in sustainable projects.
The process showed us that it pays to go green and it was a proud moment to know that this was a successful first for Cape Town.
Our green bond was certified by the Climate Bond Initiative’s Climate Bond Standard and received a GB (1) ‘Excellent’ rating from Moody’s.
Despite the bleak national economic outlook, Cape Town maintained our national scale rating of Aaa.za from Moody’s.
We achieved this through clean governance, by receiving four clean audits and spending the money of Capetonian ratepayers in the best way to create an inclusive and caring city.
We commend the JSE for launching this green bond segment today.
Cities are where the rubber hits the road because we have to reduce emissions and deal with droughts, floods and the erosion of coastlines.
Cities are the drivers of change and most people live in cities because of urbanisation. Cape Town and many cities around the world are living examples of the impact of climate change.
We are experiencing the worst drought in recorded history.
To deal with this crisis, we have a two-pronged strategy:
Firstly: drive down demand
Secondly: augment water supply because we can no longer rely on rain to fill our dams.
80% of the funding we raised from our R1 billion green bond will be used for water resilience projects as part of our drought relief efforts.
Similarly, with energy, we have to reduce our reliance on fossil fuel energy. While we were raising funds for our green bond, we also announced that we have divested from companies that depend on income from fossil fuel-related assets.
The City of Cape Town has just signed the C40 Fossil Fuel-Free Streets Declaration to fight air pollution, improve the quality of life for all residents, and help tackle the global threat of climate change through a range of actions.
We are forced in South Africa to buy fossil fuel energy from Eskom that continues to pollute our cities. The City has now taken Eskom and NERSA to court because we set a goal of an energy mix with 20% coming from renewables by 2020.
The only obstacle is our national government that prevents us from buying renewable energy directly from independent power producers.
We hope to get a court date later this year.
It is no longer justifiable to buy fossil fuel from Eskom, because of the corruption and looting that takes place.
They have asked for a 19,9% increase in electricity tariffs, but as the City we will oppose this. They are looting and stealing from our residents, with no accountability.
Another area where the City will be using the funding is to reduce carbon emissions. Private vehicles and public transport are responsible for 70% of carbon emissions.
This is why we started the process of procuring electric buses to reduce emissions. We are also in discussions with the company that will be providing us with these buses to set up a factory and produce them in Cape Town, which they can use as a spring-board into the rest of Africa.
In closing, we have learnt a great deal about this market in the City of Cape Town and I want to thank investors again for their confidence in Cape Town. We will continue pushing the boundaries even more to build on this confidence in our city even more.
I am indeed proud to represent my city and share Cape Town’s successes at the JSE green bond segment launch and wish you all the success with this bold and necessary venture.
With more investors directing their funds to green bonds, together we can make an even greater impact in addressing climate change for the sake of our residents and our planet and protecting investment and jobs in our economy.