Nedbank commits to more sustainable housing

In a boost for South Africa’s construction sector, Nedbank Corporate and Investment Banking (CIB) is to accelerate its funding for affordable homes after securing a US$200mn loan from IFC, the World Bank’s private finance arm

IFC will provide Nedbank CIB with a senior loan of US$200mn to further scale lending to what it called ‘green buildings developers’ in South Africa’s residential, commercial, industrial and retail property sectors.

The partnership will help bridge the country’s housing deficit and support the transition to a lower-carbon economy, IFC noted in a statement.

Each building will be certified through IFC’s Excellence in Design for Greener Efficiencies (EDGE) or equivalent standard for energy and water efficiency and for the use of more sustainable construction materials.

At least half of all funds allocated to new residential developments will target the affordable housing segment.

IFC was also an investor in Nedbank CIB’s green bond issue of 2021, providing funding to support EDGE (or equivalent standard) certified buildings in the country.

“Under the bond, Nedbank CIB was able to deliver 1,790 EDGE-certified units, including 1,305 affordable homes,” said Vanessa Murray, divisional executive, property finance at Nedbank CIB.

“The new facility allows us to scale this impact even further, expanding the reach to other real estate segments and aligning with global green building standards while addressing the country’s housing and infrastructure needs.”

Murray said another example of the bond’s impact is illustrated by the creation of the bank’s in-house EDGE expert team, the only one of its kind in an African financial institution.

With IFC support, it has trained 21 Nedbank CIB staff and 21 clients, which enabled the certification of landmark projects such as the Mall of Africa, the largest EDGE-certified retail centre in the world.

“We are proud to partner with Nedbank CIB to expand certified green buildings in South Africa, including for affordable housing,” said Claudia Conceiçao, IFC’s regional director for Southern Africa.

“This collaboration drives South Africa’s shift to a low-carbon economy while improving lives and communities.”

South Africa aims to reduce its GHG emissions by 42% by 2025 and reach net zero carbon emissions by 2050, with green buildings designated as a major part of the solution to meet targets.

Globally, conventional buildings account for nearly 40% of energy-related GHG emissions.

Also read: Standard Bank IFC to support sustainable housing construction