International Finance Corporation (IFC), the investment arm of the World Bank group, has extended a loan of $250 million to HDFC Ltd to boost affordable housing finance in India.
At least 25 per cent of the financing has been earmarked for green affordable housing, which is likely to encourage this market in India. “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,” HDFC and IFC said in a statement.
“This partnership with HDFC offers multiple benefits for India, as it can play a leading role in developing the country’s nascent green affordable housing market, while delivering jobs and a climate dividend,” said Hector Gomez Ang, Regional Director for South Asia at IFC. “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.”
Renu Sud Karnad, Managing Director, HDFC, said, “we are working towards deepening our footprint in financing more affordable, smart and green homes. We hope this partnership with IFC covering both themes — affordable and green housing — will materially further our outreach.”