Company announcements Home » Investors » News » Company announcements » Harmony demonstrates ESG¹ in action as it concludes ESG-linked loans and starts construction of three 10MW solar photovoltaic plants 2022 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Harmony demonstrates ESG¹ in action as it concludes ESG-linked loans and starts construction of three 10MW solar photovoltaic plantsJune 02, 2022 Johannesburg, Thursday, 2 June 2022. Harmony Gold Mining Company Limited (“Harmony” and/or “the Company”) is pleased to announce that it has concluded a new syndicated multi-tranche, multi-currency, loan facility, aimed at sustainable development, as well as a power purchase agreement (“PPA”) facilitating Phase 1 (30 megawatts “MW”) of its renewable solar photovoltaic (“PV”) energy initiative. The first phase of Harmony’s renewable energy journey consists of a 30MW solar energy plant in the Free State. In Phase 2, the Company will be building an additional 137MW of renewable energy at our various longer-life mines while Phase 3 is in planning stage and progressing as anticipated. Harmony expects Phase 2 of its renewable energy project to deliver over R500 million per annum in electricity cost savings once it reaches full production in FY25. “The ESG-linked financial transactions that we have concluded, alongside the construction of the solar energy plants, are a watershed moment for Harmony and our host communities. Not only will these transactions help us to deliver on our environmental and social obligations and undertakings, but they will also 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,” Steenkamp added. The conclusion of the following transactions demonstrate Harmony’s commitment to sustainable development – in particular decarbonisation: 1 Phase 1 of the solar PV power purchase agreement In Phase 1 of Harmony’s decarbonisation strategy, the Company has established an independent power producer (“IPP”) for the construction of the three PV plants. These plants will have a total installed capacity of 30MW and will deliver more than 68 gigawatt hours (“GWh”) of clean power to Harmony’s Free State operations, mitigating 65 000 tonnes of carbon dioxide emissions in their first 12 months of operation. 1.3 terawatt hours (“TWh”) of clean energy is expected to be delivered over their 20-year lifespan. The solar plant projects were jointly developed by Harmony, Energy Group (a specialist advisor and investor in industrial clean energy projects in Southern Africa), and BBEnergy (a South African engineering company that specialises in solving complex engineering problems in the energy and water fields). The project was funded by a project finance debt solution from Rand Merchant Bank, a division of First Rand Bank Limited, and with the support of African Clean Energy Developments (ACED), equity-funded by African Infrastructure Investment Managers and Mahlako Energy Fund. The plants rank amongst the biggest solar PV plants for private offtake in South Africa to date and first energy is expected to flow from the plants in March 2023. 2 Syndicated multi-tranche, multi-currency, loan facility of US$400 million and R4 billion Harmony’s goal is to be net carbon zero by 2045. Phase 1 and 2 of Harmony’s renewable energy programme are key interventions, supported by science-based targets, as the Company journeys towards this ambition. The syndication was led by ABSA Bank Limited (acting through its Corporate and Investment Banking Division) (ABSA), and Nedbank Limited (acting through its Corporate and Investment Banking Division) (Nedbank) and was well supported by a variety of local and international banks and financial institutions (jointly referred to as “the lending group”). The syndicated, multi-currency, multi-tranche loan facilities include the following components: a Green Loan (“Green Loan”): a R1.5 billion term loan ring-fenced for renewable energy projects as part of Phase 2 of Harmony’s renewable energy roll out; andsustainability-linked loans consisting of:a R2.5 billion revolving credit facilitya US$300 million revolving credit facilitya US$100 million term loan The Green Loan of R1.5 billion is designated to fund Phase 2 of Harmony’s solar PV strategy (Phase 2 targets up to 137MW of peak generation capacity). The cash flow profile of this loan has been tailored to closely match the expected cash flow of the solar PV build, followed by the expected savings in energy costs for Harmony’s South African mining operations. 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 three sustainability-linked loans align with the Company’s ESG and sustainable development targets. As part of the transaction, Harmony and the lending group have agreed on the following progressive sustainability targets, or key performance indicators (“KPIs”), over the next three financial years: KPI 1 – GHG2 emissions: Reduction of Scope 1 and 2 emissions from an FY213 baseline of 4 896 000 tons to 4 074 000 tons by FY25KPI 2 – Renewable energy mix: Targets a 20% renewable energy mix by FY25 from a 0% baseline in FY21KPI 3 – Potable water consumption: Target a reduction to 19 436 mega litres (“Ml”) of potable water consumption by FY25 from a baseline of 21 083 Ml in FY21 An independent service provider applying the Sustainability Linked Loan Principles as issued by the Loan Market Association (amongst others), has independently verified the credibility of these targets. Upon meeting the KPIs, Harmony will receive meaningful interest savings, while inversely similar penalties become payable if all targets are missed. The sustainability-linked loans have an original term to maturity of 3 years, and includes extension options to that could add a further 2 years to the final maturity date. More information on Harmony’s decarbonisation projects and plans For details of Harmony’s energy rollout and decarbonisation plans, see the dedicated energy tab on the company’s ESG portal https://www.harmony.co.za/sustainability/environment/energy-climate-change/ Download links Harmony ESG Report 2021 – https://www.har.co.za/21/download/HAR-ESG21.pdf Climate related financial disclosures – https://www.har.co.za/21/download/HAR-CRFD21.pdf Footnotes 1 ESG = Environmental, social and governance2 GHG = Greenhouse gas3 FY = financial year 2 June 2022 For more details, contact: Jared CoetzerHead: Investor Relations+27 (0) 82 746 4120 JSE Sponsor: J.P. Morgan Equities South Africa Propriety Limited Harmony Gold Mining Company Limited (Harmony), a world-class gold mining and exploration company, has operations and assets in South Africa and Papua New Guinea (PNG). Harmony has more than 70 years’ experience in the industry. Company assets include one open pit mine and several exploration tenements in PNG, as well as 9 underground mines and 1 open pit operation and several surface sources in South Africa. In addition, Harmony owns 50% of the significant Wafi-Golpu copper-gold project – a tier 1 asset – in a joint venture in PNG. The company’s primary stock exchange listing is on the JSE with a secondary listing on the New York Stock Exchange. The bulk of our shareholders are in South Africa and the United States. Additional information on the company is available on the corporate website, www.harmony.co.za.
