TUHF has partnered with the International Finance Corporation to increase access to affordable housing and promote green construction practices.

Through an up-to R960 million loan, the partnership will support inclusive, sustainable urban development by financing small and medium enterprises (SMEs) to build green-certified rental properties in South Africa’s inner cities and townships.

“Our partnership with IFC underscores TUHF’s dedication to delivering sustainable, affordable housing solutions that address socio-economic and environmental challenges – in other words, sustainable impact — in South Africa’s urban landscape,” says Paul Jackson, CEO of TUHF. “Together, we aim to empower property entrepreneurs, improve livelihoods, and set new benchmarks for sustainable impact investing in the housing sector.”

The IFC’s investment will be channelled through an up to R1.2 billion special purpose vehicle with additional funding to be contributed by TUHF and third-party lenders. The local currency loan protects South African borrowers from the negative effects of exchange rate fluctuations with its long-term nature ensuring financial sustainability.

This initiative further cements TUHF’s objective of building a Sustainable Impact Bond approach – one that delivers on both social and environmental impact while ensuring financial inclusion and long-term resilience.

Additionally, the IFC will provide advisory services to enhance TUHF’s capacity to originate and manage loans for certified green buildings. The introduction of an ESG System, developed with support from the IFC and Proparco, will further strengthen TUHF’s ability to monitor and report on ESG outcomes.

This partnership will be supported by the Market Accelerator for Green Construction (MAGC) program, a collaboration between IFC and the UK government to promote green construction in emerging markets. TUHF’s projects will align with the program’s objectives by prioritising retrofitting and converting existing buildings, reducing embodied carbon, and constructing new developments that meet stringent green building standards. Retrofits and conversions will qualify for a performance-based incentive (PBI) funded by MAGC.

The MAGC provided PBIs, totaling $7.8 million, are designed to support TUHF’s end borrowers, who often operate in high-risk or underserved areas. These incentives will directly reduce loan amounts, making sustainable development more accessible to South Africa’s SME property entrepreneurs.

The IFC partnership will also complement TUHF’s focus on Environment, Social, and Governance (ESG) principles, reinforcing its broader commitment to transformation and impact investing. By incorporating green finance into its core operations, TUHF facilitates urban densification and combats sprawl, enabling tenants to access affordable rental housing near economic hubs and amenities.