IFC offers a $400 million loan for HDFC
- ByStartupStory | December 24, 2022
In order to promote the development of green housing in India, the International Finance Corporation (IFC), the investment arm of the World Bank, has offered to give HDFC Ltd. $400 million (about 3,400 crore).
According to a statement from the corporation, 75% (or about $300 million) of the capital’s proceeds would go toward expanding HDFC’s portfolio of green, affordable housing.
“We are keen to increase our footprint in funding affordable and green housing and are committed to supporting India’s efforts for a sustainable and green, low-carbon economy. This investment will help galvanize HDFC’s efforts to cater to the underserved segments of the population, boosting economic resilience and supporting the government’s vision of housing for all,” said Renu Sud Karnad, managing director – of HDFC Ltd.
Furthermore, the lending framework would establish strict criteria for green projects, enabling HDFC to promote a pipeline of high-quality green homes while channeling funding to this market. The statement went on to say that the company will also be able to lend to borrowers with the help of IFC’s finance package, guaranteeing that they can afford such housing.
HDFC Ltd. made the decision to combine with its banking affiliate HDFC Bank earlier in April. It had agreed to merge with its parent company, the largest mortgage lender in the nation, in an all-stock transaction for around $64 billion, creating a $160 billion financial services behemoth that will be better able to capitalize on the increasing demand for mortgages.
“With a growing need for affordable housing and a largely underpenetrated market, IFC’s investment in HDFC will underscore the fact that lending to underserved populations is viable, catalyzing the market segment,” said Hector Gomez Ang, regional director for South Asia, IFC.
IFC, which bills itself as the largest international development organization, focuses on the private sector in developing economies. It asserts to have invested more than $1.7 billion in India’s housing finance companies since 2010 for the purpose of on-lending to retail purchasers of affordable housing as well as affordable and green housing developers.
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