Financial instrument to unlock $400M in green homes

Future-proofing people and planet: The financial instrument that will unlock $400 million in green affordable housing.

This London Climate Action Week, all eyes are on those stepping into the heart of the UK to accelerate the global fight against climate change. But what will it take to catalyse the decade of action we need to meet the commitments of the Paris Agreement?

We know that one of the biggest carbon emitters today is the built environment, contributing nearly 40% of global greenhouse gases. Yet rapid urbanisation demands we build 96,000 new homes every day until 2030. It’s clear this sector needs a sustainable overhaul and a sizable injection of cash.

The level of investment necessary, however, is critically constrained by a lack of confidence in the green affordable homes market – despite its potential to catalyse economic growth, gender inclusion and climate mitigation.

Green Affordable Housing Finance – developed by innovators and investors, Reall and endorsed by the Global Innovation Lab for Climate Finance – is a financial instrument that has been uniquely designed to revolutionise how we finance and build green homes in emerging markets. The high-impact design champions a gender-equitable and resilience-boosting model that contributes to eight SDGs and will mobilise 400 million in private capital.

How does it work?

It’s core innovation lies in its ability to unlock in-country finance for both construction and offtake of green affordable housing; a solution that’s poised for pilot in Kenya and equipped for expansion across African and Asian markets.

The mechanism is underpinned by a Guarantee Facility and supporting Enabling Environment Facility (EEF) that work together to:

Build supply of green affordable homes

• The EEF deploys targeted finance and expertise to both local lenders and developers to deliver IFC EDGE-certified green homes. In parallel, guarantees are extended to de-risk construction loans from local lenders, incentivising vast up-take of sustainable construction practices and advancing to net zero.

Increase access to housing finance

• The EEF equips local lenders with new AI-driven housing finance products for low-income earners, with priority given to women-headed households. Guarantees will de-risk mortgages to expand credit access and boost offtake for developers of green affordable homes.

By boosting the confidence of lenders and developers, the instrument fosters a self-sustaining ecosystem and normalises local construction and mortgage lending for green affordable homes.

“Green Affordable Housing Finance is a powerful investment opportunity to mitigate the climate crisis and break the poverty cycle for good. We are looking for game-changing partners to buy into this high-impact investment opportunity for people and planet”.
– Lucy Livesley, Policy and External Affairs Director, Reall.

Get in touch with Lucy at [email protected] to take part.

Read our Instrument Overview for more information (2 Pages, 2GB, PDF).

Reall is an innovator and investor in green affordable homes in urban Africa and Asia. With over 30 years’ experience working in emerging markets, Reall have invested over $72 million and impacted over 3.5 million people. Visit reall.net to find out more.