International Finance Corporation (IFC), private sector investment arm of World Bank Group, has provided a loan of $250 million to housing finance company HDFC Ltd to expand the green affordable housing portfolio, improving access to people with lower income. The funding will help improve access to finance, while also supporting India’s climate goals.
As much as 25 per cent of the financing has been earmarked for green affordable housing. While green housing is regarded as a luxury market in India, IFC intends to challenge that perception and help boost green affordable housing by partnering with HDFC, said the investor.
The boost of affordable green housing is also in line with the government’s plans to provide ‘Housing for All’.
"At HDFC, we are aligned to the Prime Minister's vision of Housing for All, especially through promotion of affordable housing. We have parallely cultivated a strong emphasis on ESG, enhanced our environment & social due diligence for on-lending and are working towards deepening our footprint in financing more affordable, smart and green homes,” said Renu Sud Karnad, MD of HDFC Ltd.
Hector Gomez Ang, Regional Director for South Asia at 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."
IFC estimated that there’s a $1.25 trillion investment opportunity in green residential housing in India to the year 2030.The investor said that it has made investments worth over $920 million in housing finance companies in India, out of which 85 per cent was in the last five years alone.
Around 275 million people or 22 per cent of India’s population don’t have access to adequate housing due to rapid urbanisation and lack of affordable housing finance.
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