IFC has given a $400 million loan to HDFC to boost green affordable housing finance in India. IFC’s funding will support the country’s shift toward a more sustainable growth path, creating jobs and ensuring long-term business growth, as per a statement issued by the two entities.

“A new investment will help close the urban housing gap and improve access to climate-smart affordable homes in India... IFC’s funding will help HDFC especially focus on its green affordable housing portfolio, with 75 percent ($300 million) of the proceeds earmarked for this sector,” according to the statement.

Additionally, the lending framework will set rigorous standards for green buildings, allowing HDFC to boost a quality green housing pipeline while chanelling funds to this segment.

Most importantly, IFC’s financing package will enable the company to on-lend to borrowers, ensuring they can afford such housing, the statement said. IFC (International Finance Corporation) is a member of the World Bank Group. “It is estimated that 275 million people in India – 22 percent of the population – do not have access to adequate housing and rural housing shortage is twice that of urban areas.

‘Under-penetrated’

“As of 2018, the urban housing shortage was 29 million units, increasing by over 54 percent since 2012, according to recent estimates. Despite the demand, India’s mortgage market remains significantly under-penetrated, reflecting massive unmet demand for housing finance,” as per the statement.

Renu Sud Karnad, Managing Director — HDFC Ltd said, “Given our long-standing partnership, we welcome IFC’s expertise to help strengthen our green affordable housing lending portfolio. We are keen to increase our footprint in funding affordable and green housing …This timely investment will help galvanize HDFC’s efforts to cater to the underserved segments of the population, boosting economic resilience and supporting the government’s vision of ‘Housing for All’.”

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