TUHF has launched a major initiative in collaboration with the PROPARCO Crisis Emergency Response Technical Assistance Facility (CERTAF), funded by the European Union, to further enhance its ability to incorporate sustainability into its operations.

TUHF is financial institution with a long-standing commitment to empowering small property entrepreneurs and the development of affordable housing and this initiative is a step towards integrating a comprehensive Environmental and Social Management System (ESMS) into its business practices.

For plus twenty-one years, TUHF has been at the forefront of financing small property entrepreneurs in acquisition, construction, and renovation of affordable rental housing in SA’s central urban areas. Its work is driven by the need to address the growing demand for housing among low- and middle-income communities, contributing to the development of sustainable and inclusive urban environments. To date, TUHF has helped finance over 50 000 housing units, 95% of which are considered affordable.

This focus on affordable housing aligns with SA’s national strategy, established in 1996, to provide greater access to housing for all, particularly in the democratic era. TUHF’s ability to fund these projects not only improves living conditions but also stimulates economic growth and revitalises city centers across the country.

In 2023, TUHF signed a loan agreement with PROPARCO that included a commitment to integrate environmental and social considerations into its operations. With CERTAF’s support, TUHF is now taking decisive steps to fulfill this commitment through the development and implementation of a tailored ESMS.

“We are extremely satisfied with the technical assistance provided by CERTAF. This collaboration is a crucial step in strengthening our commitment to environmental and social responsibility, ensuring that we can continue to provide affordable housing solutions while adhering to the highest standards of sustainability. The support we’ve received is not only helping us meet regulatory requirements but also enhances our ability to manage risks and serve our communities more effectively,” said Katherine Cox, Research & Development Impact Manager.

The CERTAF technical assistance includes the design of an ESMS that will help TUHF better identify, assess, and manage environmental and social risks. The ESMS framework covers a wide range of areas, including E&S policy, risk management procedures, due diligence tools, governance structures, and a grievance redress mechanism. TUHF considers women, vulnerable and disadvantaged groups as both end users and beneficiaries of its investments whether directly or indirectly, as such, the ESMS includes consideration to safeguard these groups in the communities in which it serves. CERTAF also provides capacity-building support to its team, ensuring that its staff are well-equipped to implement these systems and incorporate sustainability into their daily operations.

The CERTAF technical assistance (TA) initiative included a thorough gap analysis of TUHF’s existing governance frameworks, followed by the development of an action plan to close any gaps identified. The TA sought to address compliance risks, project delays, and challenges related to incorporating the ESMS into TUHF’s operations. Owing to CERTAF support, TUHF will be better positioned to mitigate environmental and social risks while continuing to provide critical financing to South Africa’s property entrepreneurs. More widely, it will help TUHF to become a more attractive longer term investment partner for PROPARCO and wider international financial institutions.

“We are confident that the ESMS framework will enhance TUHF’s operational sustainability, mitigating potential environmental and social risks, and will help them to become an even more attractive investment partner, while crucially creating a positive impact in the affordable housing sector in South Africa,” highlighted Alex Ingleson, CERTAF Senior Facility Manager.

Corroborating this, Kaidi Eddie-Obiakor, Senior ESG & Gender Expert under the CERTAF Facility, added that “Not only does TUHF’s unique business model set a standard for creating access to affordable housing, but by implementing ESG-aligned risk management mechanisms, TUHF adopts a more balanced approach to mainstreaming sustainability that moves beyond social impact to also effectively managing risks associated with its financing activities. This is an effective way for the company to establish long term relevance in the market.”

“With CERTAF’s ongoing support, we look forward to continuing our mission of supporting property entrepreneurs while advancing our environmental and social impact. This partnership allows us to build a more resilient and sustainable business model that will benefit not only our institution but also the communities we serve,” concluded Cox.