IFC partners with FirstRand Bank to expand green building and affordable housing finance

The International Finance Corporation (IFC) has granted FirstRand Bank Limited a $250 million senior loan to support and scale the availability of green building and green home loan finance for South Africans.

The investment, which comprises an IFC loan of up to $200 million, and a loan of up to $50 million from the Managed Co-Lending Portfolio Program (IFC’s syndications platform for institutional investors), will further scale up the bank’s lending to property developers and home buyers of green buildings. Designated portions of the home loan portfolio will be allocated to the affordable housing segment and women.

The IFC will also provide capacity building to FirstRand’s appraisers, loan officers, and internal teams, and to its construction partners, advising on FirstRand’s product development, as needed.

This investment will benefit from a performance-based incentive grant, under the IFC and 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 green buildings or purchasing green homes.

Under the Paris Agreement, South Africa aims to reduce its GHG emissions by 42 percent by 2025, with green buildings designated as a major part of the solution to meet its 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, with a focus on renewable energy and green buildings.