Housing Development Finance Corporation Ltd (HDFC) and IFC have partnered to promote affordable green housing finance for low income borrowers in the country.
“IFC’s $250 million loan to HDFC will support its moves to grow its affordable housing and emerging green affordable housing portfolio by improving access to such housing for people on lower incomes,” the two said in a statement on Sunday.
At least 25 percent of the financing is earmarked for green affordable housing.
“Green housing is largely regarded as a luxury market in the country, but given its climate benefits, IFC intends to challenge that perception and help boost green affordable housing by partnering with HDFC, with its deep penetration in the Indian housing market and significant commitment to promoting green,” the statement said.
According to IFC estimates, there is a $1.25 trillion investment opportunity in green residential housing in the country by 2030. IFC has invested over $920 million in housing finance companies in India—85 percent in the last five years—for on-lending to retail buyers of affordable housing and developers of affordable and green housing.
“This partnership with IFC covering both themes affordable and green housing, we hope, will
materially further our outreach,” said Renu Sud Karnad, Managing Director, HDFC Ltd.
Green affordable housing can help India on its path to deliver on its commitments under the Paris Agreement, to reduce a third of its carbon emissions by 2030 from 2005 levels.
Hector Gomez Ang, Regional Director for South Asia, IFC said, “With most banks and housing finance companies in India still at the stage of evolving their business models to lend to lower income people, this investment should send a clear demonstration that green affordable housing is viable and needed, especially as India moves on the road to recovery from the impacts of Covid-19.”