Standard Bank’s $250m IFC loan will boost green financing initiatives

Standard Bank has successfully closed a $250m seven-year unsecured loan from the International Finance Corporation (IFC), which will bolster efforts to promote sustainable development through green financing. 

The funds will be allocated towards green buildings and green home loans. This initiative is designed to expand access to financing for green buildings, helping developers overcome the upfront cost barriers associated with sustainable construction and certification and facilitating end-consumer finance to acquire green homes.

Through this facility, Standard Bank will provide tailored financial solutions to real estate developers and homebuyers that align with global best practices for green construction.

The funds will support greenfield projects in industrial, retail, and residential sub-sectors, with a focus on affordable housing within the residential subsector. This loan aligns seamlessly with Standard Bank’s sustainability strategy and its commitment to supporting increased demand for greening initiatives in the real estate sector.

Standard Bank says SA’s property sector presents immense growth potential, and with rising urbanisation, the demand for sustainable, resource-efficient developments has never been greater. This collaboration with the IFC allows the bank and its clients to meaningfully grow a more sustainable real estate landscape. 

The IFC’s $250m loan is accompanied by a performance-based incentive (funded by the UK represented by the Department for Energy Security and Net Zero) that Standard Bank would look to allocate to eligible developers and homeowners to rebate the green certification costs.

By leveraging blended finance solutions such as the IFC MAGC (Market Accelerator for Green Construction) programme, which focuses on accelerating the construction of certified green buildings, Standard Bank will enable more real estate clients and homeowners to incorporate green building standards. Benefits will include lower utility bills, stable electricity supply, increased property value, and potential access to cheaper funding. 

Cláudia Conceição, IFC’s regional director for Southern Africa, said: “IFC is pleased to expand the collaboration with Standard Bank, our long-standing partner in SA, to help widen access to finance for certified green buildings. As we continue to champion innovative blended finance solutions to support high-impact segments in the real estate sector, such as affordable housing and women homeowners, IFC is helping with their transition towards a more sustainable future and supporting the growth of a more inclusive and resilient economy.”

Standard Bank, already a leader in the residential home loan sector in SA, hopes to grow and entrench its position as a sustainable financier of choice in the residential property and home loan sector.

The bank’s commitment to green financing is evident in its green home loans book, which has grown exponentially over the past two years. These green-certified homes meet stringent environmental standards, achieving significant energy and water consumption savings. 

Standard Bank is committed to driving sustainable development and creating long-term value for its stakeholders. 

This article was sponsored by Standard Bank.