SOUTH AFRICA – FirstRand Bank Limited, a financial services provider, has secured a US$250 million senior loan from the International Finance Corporation (IFC) to support and scale the availability of green building and green home loan finance for South Africans.
The funds will further scale up the bank’s lending to property developers and home buyers for green buildings, stimulating economic growth and boosting the country’s climate resilience.
Designated portions of the home loan portfolio will be specifically allocated to the affordable housing segment and women.
The investment comprises an IFC loan of up to US$200 million and up to US$50 million from the Managed Co-Lending Portfolio Program, IFC’s syndication platform for institutional investors.
IFC will also provide capacity building to FirstRand’s appraisers, loan officers, internal teams, and construction partners and 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.
“This is in line with the bank’s ambition to facilitate growth in home ownership, particularly for low-income customers and women, in a climate-responsible way.”
This investment will benefit from a performance-based incentive grant under the IFC, the German Government’s Federal Ministry for Economic Affairs and Climate Action (BMWK) Partnership, and the Market Accelerator for Green Construction (MAGC) Program. FirstRand will allocate the PBI grant to eligible developers and buyers constructing or purchasing green buildings or homes.
“IFC’s partnership with FirstRand will provide not only 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.
“By scaling climate finance and strengthening green finance standards, we encourage other financial institutions to do the same.”
Green homes are residential properties certified for reducing water, energy, and materials use under an eligible green building certification program, including IFC’s EDGE. Green home loans 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, and green buildings are designated as a major part of the solution to meet these targets.
Since 2020, IFC has invested and directly mobilized US$1.5 billion in green and sustainable investments in South Africa through its financial institutions’ partners, focusing on renewable energy and green buildings.
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