Green initiatives News

Absa SA’s first bank to launch climate-smart housing rebate

Absa and the International Finance Corporation (IFC) have launched an initiative in SA’s residential property market aimed at promoting sustainable living.

The three-year initiative, in the form of a rebate to Absa customers, will support prospective homeowners with purchasing green-certified homes through the UK-IFC Market Accelerator for Green Construction (MAGC) programme which provides blended concessional finance and advisory support to catalyse the development of green buildings across emerging markets.

Absa customers who purchase properties valued at less than R5 million (directly from an Absa-approved Eco Home Loan development) are now eligible to receive between 1.5% to 3% of their loan amount back in a rebate. This incentive will be credited directly into the customer’s home loan account and capitalised against the outstanding balance, reducing their loan amount and saving them further interest over the term of their mortgage.

We are thrilled to be the first South African bank to introduce such a rebate in the residential property market,” says Nondumiso Ncapai, Managing Executive for Absa Home Loans. “This initiative is not just about promoting green living; it’s about being a catalyst for an industry-wide shift towards sustainability. By incentivising the purchase of eco-friendly homes, we are paving the way for a more sustainable future and demonstrating our commitment to our ESG goals.”

Absa introduced South Africa’s first Eco Home Loan in collaboration with Balwin Properties in 2020, offering customers who purchase properties in Excellence in Design for Greater Efficiencies (EDGE) certified developments a rate concession of 0.25% on their mortgages. The EDGE standard sets minimum thresholds for energy and water consumption savings for homes to be classified as eco-friendly.

In addition to this 0.25% rate concession, qualifying Absa customers now stand to save further on their EDGE-certified homes as illustrated below:

This residential property rebate is part of a R4.5 billion deal between Absa and IFC. The IFC estimates that the broader project has the potential to reduce South Africa’s annual emissions by over 12 000 tons, marking a substantial environmental impact.

IFC is dedicated to supporting access to eco-friendly and resource-efficient residential options in South Africa as a measure against climate change, to safeguard the environment, and to bolster economic growth,” said Adamou Labara, IFC’s Country Manager for South Africa. “Our partnership with Absa will help promote green housing as an option for prospective homeowners.”