New Delhi, India, November 6, 2013
—IFC, a member of the World Bank Group, will provide a $85 million loan to Dewan Housing Finance to expand finance for affordable and energy-efficient housing in India. The loan is being given with the support of the Government of Canada.
Of the total loan, IFC will provide $70 million through external commercial borrowing. IFC has committed an additional $15 million to finance green mortgages under the IFC-Canada Climate Change Program, made possible thanks to the Government of Canada's instrumental contribution, which made the financing package viable. IFC is the implementing agency for the program. The loan to Dewan, to be used for green mortgages, will reduce 6,200 tons of carbon emissions per year.
“While housing finance is one of the lowest risk asset classes in India, financial institutions have so far shown limited interest in the low income segment,” said Kapil Wadhawan, Chairman and Managing Director, Dewan Housing Finance. “IFC’s investment will demonstrate the viability of offering housing finance to low and middle income clients. IFC's support to Dewan is a recognition of the company's track record in serving this segment."
The housing finance market in India has a huge gap to fill. According to India’s Twelfth Five Year Plan (2012-2017), the housing shortage in the country is estimated at 58.8 million units. Over 90 percent of this demand is from low-income households, especially the under-served segments.
“Promoting housing finance is one of the key priority areas for IFC in India, especially in India's low income states,” said Serge Devieux, IFC Director for South Asia. “By demonstrating the benefit of green homes, the project is expected to help home buyers in low and middle income segments buy affordable energy-efficient homes.”
IFC has a long-term partnership with Dewan Housing over the last decade. In 2003, IFC provided a loan of around $12.5 million to the company. IFC also co-invested in Aadhar Housing Finance, a company jointly promoted by DHFL Group and IFC, which provides affordable home loans to low income borrowers.
About the IFC-Canada Climate Change Program
The IFC-Canada Climate Change Program promotes private sector financing for clean energy projects. Canada’s financing to IFC for this program is part of its overall fast-start financing contribution for 2010–2011. Under the Copenhagen Accord, developed countries committed to provide fast-start financing of almost $30 billion for 2010–2012 to support climate change mitigation and adaptation in developing countries. As part of Canada’s commitment to support climate change action in developing countries, Canada is contributing $1.2 billion Canadian dollars in new and additional climate change financing over three years (fiscals 2010–2013).
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
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