The International Finance Corporation (IFC) - a member of the World Bank Group - says it has partnered with FirstRand Bank to support and scale the availability of green building and green home loan finance for South Africans, stimulating economic growth and boosting climate resilience in the country.
IFC will provide a $250 million (R4.6 billion) senior loan to FirstRand, South Africa's second largest bank by balance sheet, to further scale-up the bank's lending to property developers and home buyers for green buildings.
Designated portions of the home loan portfolio will be specifically allocated to the affordable housing segment and to women.
The investment comprises an IFC loan of up to $200 million, and a loan of up to $50 million from the Managed Co-Lending Portfolio Program, IFC's syndications platform for institutional investors.
The lender said it will also provide capacity building to FirstRand's appraisers, loan officers, and internal teams, and to its construction partners. IFC will advise on FirstRand's product development, as needed.
"We are pleased to continue to partner with IFC to deliver sustainable financing solutions particularly anchored to developers of green buildings, affordable housing, and women borrowers," said Bhulesh Singh, FirstRand Group Treasurer.
"IFC's partnership with FirstRand will not only provide vital funding for access to housing but also expand green-certified construction loans and home mortgages in South Africa, helping the housing sector become more climate friendly and resilient," said Cláudia Conceição, IFC's Regional Director for Southern Africa.
FirstRand will allocate the PBI grant to eligible developers and buyers constructing green buildings or purchasing green homes.
Green homes are residential properties that are certified for reducing water, energy, and or materials use under an eligible green building certification program, including IFC's EDGE. Green home loans are used to finance the purchase of houses that meet equivalent green building standards.
Under the Paris Agreement, South Africa aims to reduce its GHG emissions by 42 percent by 2025, with green buildings designated as a major part of the solution to meet its targets.
Since 2020, IFC said it has invested $1.5 billion in green and sustainable investments in South Africa through its financial institutions' partners, with a focus on renewable energy and green buildings.
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