Going green is not just for the wealthy. Four hundred million homes are predicted to be built by 2020, and most of them will be in emerging markets. With such a high demand for low- and middle-income housing, responsible development will become ever more essential to reduce climate change. But smart developers realize that a smaller carbon footprint also translates to greater marketability — and profitability.
IFC provides long-term financing for clients who understand that sustainable development is more than a fad. To empower real estate developers in their decision-making at the early conceptual stage, IFC now offers EDGE. This green building certification system provides country-specific advice on the most ideal building materials as well as technical solutions to reduce energy and water consumption.
In addition to greenfield investments, IFC supports developers who want to make their current portfolio of properties more environmentally friendly through technical enhancements. The capital costs and maintenance of these upgrades can often be funded through the sale of generated renewable energies, rebates from utility companies, and the offering of green mortgages to home-owners.
IFC also provides equity financing in investment companies with “green” property funds that attract other like-minded investors. IFC works with these clients to develop environmental guidelines for all of the property fund’s investments. Through excellence in environmental planning, property funds result in developments that are located close to public transportation, supply on-site renewable energy, and conserve water.
VINTE, a sustainable housing developer and IFC client, is a model in Mexico for innovation and strong financial performance. VINTE’s home prices are attractive to young adults, many of whom are first-time buyers who grew up in Mexico City’s informal housing settlements. Each VINTE home is fitted with a wall meter that allows residents to monitor water and energy use. By optimizing design and focusing on energy consumption, VINTE helps home buyers reduce their carbon footprint.
IFC’s equity investment in Mexico’s Artha Capital helped this property fund to acquire land and provide basic infrastructure for 60,000 homes with low-energy lighting and solar water heaters. By taking an approach that integrates industrial, retail, tourism, and residential, Artha Capital creates employment opportunities in communities with high environmental standards, enabling people to live near their place of work.