New Delhi, India, April 14, 2016—IFC,
a member of the World Bank Group, has invested INR 5 billion ($75.8 million)
in green bonds issued by Punjab National Bank Housing Finance Ltd. (PNBHFL)
to help construct green residential buildings, facilitate development of
affordable housing, and create more jobs in India.
PNBHFL, India’s fifth largest housing finance company, will use the funds
to finance residential projects based on recognized green building standards,
including EDGE (Excellence in Design for Greater Efficiencies, a certification
program developed by the IFC). This will generate environmental and economic
benefits through the development of energy-efficient housing construction
projects and support the country’s demand for housing units and housing
loans in urban areas. PNBHFL’s green bond is the first issuance designated
to green buildings in India and IFC is the sole investor.
Sanjaya Gupta, Managing Director, PNB Housing Finance, said, “IFC’s global
experience in promoting green housing, its dedicated “green’ buildings
team, and proprietary certification platform, EDGE, will provide significant
support for us to develop more green projects.” This investment will help
the company develop a committed green lending practice and sustained growth
of its green loan portfolio.
The housing finance market in India is highly under-penetrated and caters
largely to middle-income and high net-worth individuals. The country lags
behind in the ‘green’ residential building segment, which is still in
a very early stage of development. With the residential sector accounting
for 29 percent of electricity consumption, improvement in design and construction
of residential housing can reduce emissions and fill the urban housing
gap in a sustainable manner.
“IFC is committed to developing a sustainable housing finance market through
investments that build confidence in affordable housing and green finance,”
said Jun Zhang, IFC’s India Country Head. “This project is one of a series
of transactions through which IFC is introducing the green-building concept
in the affordable housing space, while promoting our housing-for-all and
climate agendas,” he added.
IFC is one of the world’s largest financiers of climate-smart projects
in developing countries. In 2015, IFC launched the EDGE green building
certification system in India to boost eco-friendly construction and make
buildings more resource-efficient. IFC has invested in Dewan Housing
Finance Ltd. and Aadhar Housing Finance Pvt. Ltd. to help expand their
affordable housing portfolios in low-income states. IFC has also invested
in Value and Budget Housing Corporation Pvt. Ltd. and affordable housing
platforms set up by Tata Housing Development Corporation Ltd. and Shapoorji
Pallonji Company Pvt. Ltd.
The investment was made possible by IFC’s landmark Masala Bond program,
which allows IFC to raise rupee financing from offshore markets for Indian
private sector projects.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in emerging markets. Working
with more than 2,000 businesses worldwide, we use our capital, expertise,
and influence, to create opportunity where it’s needed most. In FY15,
our long-term investments in developing countries rose to nearly $18 billion,
helping the private sector play an essential role in the global effort
to end extreme poverty and boost shared prosperity.
India is IFC's top country exposure, globally. IFC's committed portfolio
in India is over $5 billion as of June 30, 2015. In FY15, IFC committed
$1.4 billion in new investments. In addition to strengthening local capital
markets in India, IFC is focused on boosting financing in infrastructure
and logistics, promoting financial inclusion, helping create conditions
to attract increased private capital, and helping structure public-private
For more information, visit www.ifc.org