Standard Bank South Africa has closed a $250 million seven-year unsecured loan from the International Finance Corporation (IFC) to significantly bolster its efforts in promoting sustainable development through green financing.

The funds will be allocated towards green buildings and green home loans with the initiative designed to expand access to financing for green buildings, helping developers overcome the upfront cost barriers associated with sustainable construction and certification, and facilitating end consumer finance to acquire green homes. Through the facility, Standard Bank will provide tailored financial solutions to real estate developers and purchasers of homes that align with global best practices for green construction.

The bank says that the funds will also support greenfield projects in industrial, retail, and residential sub-sectors with a focus on affordable housing with the loan aligning with its sustainability strategy.

“South Africa’s property sector presents immense growth potential, and with rising urbanisation, the demand for sustainable, resource-efficient developments has never been greater. This collaboration allows Standard Bank and its clients to meaningfully grow a more sustainable real estate landscape,” says Kenny Fihla, Standard Bank Group Deputy Chief Executive Officer, and Chief Executive Officer South Africa.

The IFC’s $250 million loan is accompanied by a performance-based incentive (funded by the UK represented by the Department for Energy Security and Net Zero) that Standard Bank South Africa would look to allocate to eligible developers and homeowners to rebate the green certification costs.

By leveraging blended finance solutions such as the IFC MAGC (Market Accelerator for Green Construction) programme which focuses on accelerating the construction of certified green buildings, Standard Bank South Africa will enable more real estate clients and home owners to incorporate green building standards, benefiting from lower utility bills, stable electricity supply, increased property value, and potential access to cheaper funding.

“IFC is pleased to expand the collaboration with Standard Bank, our longstanding partner in South Africa, to help widen access to finance for certified green buildings in South Africa. As we continue to champion innovative blended finance solutions to support high-impact segments in the real estate sector, such as affordable housing and women homeowners, IFC is helping in their transition towards a more sustainable future and supporting the growth of a more inclusive and resilient economy,” comments Cláudia Conceição, IFC’s regional director for Southern Africa.