- The International Finance Corporation (IFC) is providing a R600 million loan package to Business Partners Ltd, a South African non-banking financing entity specialized in providing finance, mentorship, and support programs to small and medium-sized enterprises (SME’s).
- Business Partners will use IFC’s loan to finance the construction of certified green commercial buildings in South Africa and/or to renovate existing commercial buildings to make them more environmentally friendly, making them at least 20 percent more energy efficient.
- Eligible green building certifications will include EDGE, LEED, BREEAM, and Green Star.
IFC will also provide financial incentives to Business Partners to partially offset the costs involved in greening and certifying buildings, based on the company meeting certain green building targets in their portfolio. The incentives will be funded by the IFC-UK Market Accelerator for Green Construction (MAGC) program, which has been funded by the UK Government with the objective to scale up green construction across emerging markets by incentivizing financial intermediaries to develop and introduce new green building construction finance products
Conventional buildings account for almost 40 percent of energy-related greenhouse emissions worldwide due to a growing urban population and outdated construction practices. An IFC study estimates that South Africa’s green building demand presents a $7 billion investment opportunity between 2016 and 2030. Although the supply of green buildings in the country is growing, the green building market is still at a nascent stage.
This is IFC’s first loan in South Africa exclusively dedicated to green lending for commercial properties. The investment will be supported by IFC advisory services to help Business Partners Ltd strengthen its green building finance capacity.
Author: Bryan Groenendaal