Standard Bank has teamed up with the International Finance Corporation (IFC) to support the construction and purchase of green buildings and homes in South Africa
The initiative will have a special focus on the affordable housing sector and for women home-owners.
IFC is to provide a US$250mn unsecured senior loan that will support Standard Bank to provide financing to real estate developers and homebuyers of properties that “align with global best practices for green construction,” the World Bank’s private finance arm said in a statement.
“South Africa's property sector presents immense growth potential, and with rising urbanisation, the demand for sustainable, resource-efficient developments has never been greater,” said Kenny Fihla, Standard Bank group deputy chief executive officer, and chief executive officer South Africa.
“This collaboration allows Standard Bank and its clients to meaningfully grow a more sustainable real estate landscape.”
It is hoped the partnership will catalyse more sustainable construction in South Africa’s residential, commercial, industrial and retail property sectors, with each building certified through IFC’s EDGE (or equivalent standard) for energy and water efficiency and for the use of more sustainable construction materials.
EDGE provides guidance to property developers on how to build green and rates the energy efficiency of their buildings in a fast, easy and reliable way.
Up to US$75mn of IFC’s funding will support individual home loans, with up to US$37.5mn earmarked for women seeking to purchase a home.
At least half of all funds allocated to new residential developments will target the affordable housing segment.
To offset greening and certification costs for building developments and homes financed under the project, the partnership will be further supported by a US$4.8mn performance-based initiative provided by the Market Accelerator for Green Construction (MAGC) programme.
A bilateral initiative between IFC the UK’s Department for Energy Security and Net Zero, MAGC incentivises the scaling up of green residential and commercial construction loans and mortgage financing.
“IFC is pleased to expand the collaboration with Standard Bank, our longstanding partner in South Africa, to help widen access to finance for certified green buildings in South Africa,” said Cláudia Conceição, IFC’s regional director for southern Africa.
“As we continue to champion innovative blended finance solutions to support high-impact segments in the real estate sector, such as affordable housing and women homeowners, IFC is helping in their transition towards a more sustainable future and supporting the growth of a more inclusive and resilient economy.”
IFC has invested more than US$5.2bn in South Africa in the past five years, making it the Corporation’s largest country exposure in Africa and its fifth largest globally.
PIC - Aerial view of low income housing in South Afrtica
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