HDFC borrows USD 400 million from IFC: As part of their efforts to promote climate goals, the International Finance Corporation (IFC) has provided a loan to mortgage giant HDFC in the amount of USD 400 million for the financing of green, affordable housing units.
HDFC borrows USD 400 million from IFC: Key Points
- In separate statements released, HDFC and IFC claimed that the loan would increase green housing, help close the urban housing gap, increase access to affordable climate-smart homes, and support the country’s transition to a more sustainable growth path while also generating jobs and ensuring long-term business growth.
- According to HDFC, it has set aside 75%, or USD 300 million, of the IFC cash for financing environmentally friendly affordable housing developments.
- According to HDFC estimates, 275 million people, or 22% of the nation’s population of nearly 1.4 billion, lack access to appropriate housing,
- Rural areas experience a housing crisis twice as severe as urban areas, according to HDFC.
- Urban housing was in under supply by 29 million units as of 2018, up more than 54% from 2012, according to HDFC.
HDFC for financing green affordable housing
- This timely investment will increase economic resilience and promote the government’s goal of housing for all by energising HDFC’s efforts to serve the underserved parts of the population.
- A little over 24% of the nation’s electricity is used for residential housing.
- In accordance with the 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 lowering greenhouse gas emissions through, among other things, greener construction practises and lower household energy consumption.
- IFC’s loan to HDFC demonstrates the viability of lending to underserved communities, according to Hector Gomez Ang, regional director for South Asia at IFC.
- There is a growing need for affordable housing and a market that is mostly untapped.
Since 2010, IFC has given domestic housing finance companies about USD 1.7 billion in loans for on-lending to retail buyers as well as to builders of affordable and environmentally friendly dwellings.
HDFC and IFC: Important Takeaways
- HDFC Headquarters: Mumbai, India
- HDFC Chairman: Shyamala Gopinath
- IFC Headquarters: Washington D.C., USA