Novare Equity Partners has become the first African company to partner with the International Finance Corporation (IFC) on its Greening Real Estate Investment Portfolios (GRIP) programme.
Through this agreement, Novare gains access to a comprehensive suite of advisory and investment services offered by GRIP, empowering the Johannesburg-based company to define, execute, and finance its journey towards sustainability across its shopping malls in Nigeria, Zambia, and Mozambique.
According to IFC, the real estate sector is responsible for nearly 40% of the world’s energy- and industry-related carbon emissions, with two-thirds of that in emerging markets. Novare is committed to accelerating the adoption of green building practices and moving to a more resource efficient operating model for existing and new projects.
“We are very proud to be the first African company to partner with the IFC under the GRIP initiative”, said Lerato Kumalo, Novare’s Chief ESG and Impact Officer. “It underscores our commitment to ensuring the sustainability of our environment, delivering the long-term returns sought by our investors and the profitability and well-being of our tenants in the long run.”
“Real estate is a carbon-intensive sector with great growth prospects on the continent. With the African real estate sector expected to grow at almost seven percent annually over the next few years, taking strategic, proactive steps to decarbonize is vital for the sector’s sustainability. IFC’s partnership with Novare in this space highlights our commitment to helping countries and economies transition to a greener, more sustainable future,” commented Adamou Labara, IFC Country Manager for South Africa.
This collaboration builds upon Novare’s previous accolades, including the award of “Champion” status by IFC’s EDGE initiative in October last year. EDGE, which stands for Excellence in Design for Greater Efficiencies, is a green building certification system developed by IFC. Used in more than 140 countries, EDGE helps developers and investors design and certify resource efficient and Zero Carbon buildings. It aims to cut energy and water consumption and reduce the carbon footprint of building materials.
EDGE Champion status recognises Novare’s commitment to certifying 100% of its real estate portfolio, with two of its properties in Zambia already EDGE-certified. The agreement was signed by Novare Equity Partners, which oversees the real estate investments and operations of the Black-owned and managed investment firm, and IFC.
According to IFC’s projections, green buildings in emerging markets present a substantial investment opportunity, estimated to reach $24.7 trillion by 2030. The GRIP initiative has also extended its support to various entities worldwide, including Iulius in Romania, Visum Real Estate Investment Trust in Colombia, and Marmara Hospitality in Turkey, signifying its global impact in promoting sustainability.
Cities in emerging markets are expanding rapidly to keep up with high population growth and rapid urbanisation, according to a 2019 IFC report. Research shows that green buildings appreciate in value, are lower-risk assets than standard structures, use less energy, and have lower operating costs. They also attract and retain more tenants and command higher sales prices.
Global investors are increasingly looking for sustainable investments, and ESG factors are now an integral part of their decision-making. By expanding its GRIP programme to Africa, IFC is potentially paving the way for more collaboration on the continent and increasing the opportunity for further investment and job creation as buildings undergo eco-friendly refurbishments.
Africa is home to the world’s fastest-growing urban population, and cities are increasingly recognising the need to tackle climate change, with Cape Town in South Africa, Cocody in Ivory Coast, Dakar in Senegal, Kampala in Uganda and Tsévié, Togo all making progress towards reaching zero emissions by 2050, according to the World Economic Forum.
For Novare, this partnership signifies access to burgeoning urban markets and the chance to lead Africa’s transition to a net-zero future.
“IFC’s GRIP Africa programme empowers us to refine and advance our decarbonisation strategy,” said Kumalo. “Where appropriate, IFC will provide investment in the form of innovative, green financing or other products that can support these goals. We want to be at the forefront of Africa’s transition to a net zero world. This partnership propels us towards that vision.”
