![[Kenya] Digital credit provider Tala disbursed Sh240 billion in loans in eight years](https://theafricanbusiness.com/wp-content/uploads/2023/02/TALA-APP-360x180.jpg "[Kenya] Digital credit provider Tala disbursed Sh240 billion in loans in eight years 17")
IFC joins forces with Business Partners to expand green building financing in South Africa
To support the construction of green buildings in South Africa, IFC announced a $42 million financing package for Business Partners, to help fund environmentally friendly industrial and retail sites for the use of small and medium-sized enterprises (SMEs).
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
“South Africa is one of the world’s most carbon-intensive economies and as a result the country’s green economy has huge market potential. Through investments into the development of green buildings by the SME sector, we believe we will not only be playing our part in preserving our environment but also contributing to much-needed economic growth, job creation and energy security. We are grateful to the IFC for this opportunity to support businesses that make a difference,” said Ben Bierman, Managing Director at Business Partners Ltd.
“Working together with Business Partners Ltd, IFC will contribute to the creation of commercial green buildings and to making available green commercial building finance targeting SMEs in the South African market for the first time,” said Adamou Labara, IFC’s Country Manager for South Africa. “Green building development will support South Africa’s economic recovery from COVID-19 and help the country reduce its use of strained water and electricity resources.”
By developing green buildings, this program contributes to South Africa’s ambitious nationally determined contribution under the Paris Agreement to reduce greenhouse gas emissions by 42 percent by 2025 and to decarbonize its electricity sector by 2050.
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.
