IFC Lends HDFC USD 400 Million to Finance Green, Affordable Housing Projects

As part of its efforts to advance climate goals, the International Finance Corporation (IFC) has extended a USD 400 million loan to mortgage giant HDFC for financing green affordable housing projects.

According to separate comments released by the firms on Friday, this financing would assist bridge the urban housing gap and promote access to climate-smart, affordable houses by promoting green development. This will facilitate the nation's shift to a more sustainable economic path, generate employment, and secure long-term company expansion.

HDFC has dedicated 75%, or $300 million, of the IFC money towards financing green affordable housing units.

It is estimated that 275 million people in India, or 22 percent of the country's population of nearly 1.4 billion, do not have access to sufficient housing, with the housing deficit in rural areas being twice that of urban areas. The urban housing deficit has expanded by almost 54 percent since 2012, reaching 29 million units in 2018.

"We appreciate IFC's support in growing our portfolio of green affordable housing loans, given our longtime relationship. We are committed to supporting the nation's efforts for a sustainable, green, and low-carbon economy, and we are enthusiastic to increase our funding for inexpensive and eco-friendly housing."

Renu Sud Karnad, managing director of HDFC, was quoted in the announcement.

She remarked that this timely investment will enhance HDFC's efforts to assist underserved segments of the population, increasing economic resilience and helping the government's goal of providing housing for everyone.

About twenty-four percent of the nation's energy consumption is attributable to residential housing. According to climate commitments made under the Paris agreement and at the COP-27 climate change conference in Sharm el-Sheikh, the green affordable housing sector is essential for reducing greenhouse gas emissions via, among other means, lower household energy consumption and greener building practises.

IFC's loan to HDFC indicates the potential of providing credit to underprivileged populations, according to Hector Gomez Ang, IFC's regional director for South Asia.

The market for affordable homes is largely unexplored despite rising demand.

Since 2010, IFC has given domestic housing finance enterprises with more than USD 1.7 billion for on-lending to retail consumers as well as affordable and green house developers.