IFC Invests in HDFC Affordable Housing Fund

New Delhi, Aug 7 (PTI) IFC has committed up to USD 150 million (about Rs 1,300 crore) as an anchor equity investment in H-DREAM Fund (HDFC Capital Development of Real Estate Affordable and Mid-Income Fund), promoted by HDFC Capital, in a bid to promote green, affordable housing and expand access to sustainable financing for property developers.

The real estate private equity arm of HDFC Group, HDFC Capital, will manage the fund, which has a target corpus of USD 1 billion (USD 500 million with a green shoe of USD 500 million), a joint statement said on Thursday.

The fund will finance projects that prioritise affordable and mid-income housing, while implementing the EDGE (Excellence in Design for Greater Efficiencies) green building framework, in line with global sustainability standards, it said.

H-DREAM is among the first private credit funds globally to champion the development of green, affordable and mid-income housing, it said.

IFC's commitment is expected to help mobilise up to USD 850 million (including sponsor commitment) of long-term capital from institutional investors, it said, adding that the fund will enable the development of at least 25,000 green, affordable and middle-income housing units.

"Green affordable housing delivers a dual impact: it meets the urgent need for inclusive housing while advancing sustainability in urban development. IFC's investment in H-DREAM Fund is designed to demonstrate the viability of innovative financing vehicles and mobilise long-term private capital for green housing solutions," IFC Regional Director for South Asia Imad N Fakhoury said.

By empowering developers to issue green finance instruments and scale sustainable projects, the partnership with HDFC Capital aims to create jobs, build resilience, improve livability in cities and set a benchmark for the future of urban transformation, he said.

On the development, HDFC Capital chairman Deepak Parekh said that housing remains a social imperative and has strong multiplier effects on the economy.

The H-DREAM Fund integrates sustainability with financing, which will go a long way in addressing the housing gap and build resilient communities. IFC continues to play a pioneering role in facilitating a greener and more inclusive India, Parekh added.

The buildings sector accounts for about 33 per cent of total electricity consumption globally, with residential buildings accounting for about 24 per cent. Greening this sector is crucial to sustainably bridge the housing gap, it said.

This platform will channelise global and domestic capital to address the most basic social need of housing in India. We are witnessing interest from global and domestic institutions and Indian family offices with in-principle commitments of about USD 350 million in place already, HDFC Capital MD & CEO Vipul Roongta said.