Nedbank and IFC Advance South Africa’s Net Zero Targets Through Green Housing
In a major move to support sustainable urban development and improve access to affordable housing, the International Finance Corporation (IFC) and Nedbank Corporate and Investment Banking (CIB) have announced a $200 million partnership to finance certified green buildings across South Africa. The initiative is aimed at scaling climate-resilient infrastructure while addressing the country’s acute housing deficit.
Through the agreement, IFC will extend a senior loan of $200 million to Nedbank CIB, which will be used to fund projects in residential, commercial, industrial, and retail real estate sectors. A defining feature of this partnership is that at least 50% of the funds designated for residential developments will directly support affordable housing projects. All buildings financed under this scheme must be certified under IFC’s EDGE (Excellence in Design for Greater Efficiencies) or an equivalent standard, ensuring high energy and water efficiency, and the use of sustainable construction materials.
The initiative is a continuation of an ongoing collaboration. IFC played a critical role in Nedbank CIB’s 2021 green bond issuance, investing R500 million in a R1.09 billion offering. This earlier investment resulted in the construction of 1,790 EDGE-certified housing units, 1,305 of which were classified as affordable.
Vanessa Murray, Divisional Executive of Property Finance at Nedbank CIB, emphasized the growing scale of the impact: “The new facility allows us to scale this impact even further, expanding our reach to other real estate segments while remaining aligned with global green building standards.”
She further highlighted the development of Nedbank CIB’s in-house EDGE expert team—the only one of its kind among African financial institutions. This specialized team has trained 21 internal staff members and 21 clients, facilitating the certification of high-impact projects such as the Mall of Africa, which now holds the distinction of being the world’s largest EDGE-certified retail center.
Claudia Conceição, IFC’s Regional Director for Southern Africa, lauded the partnership, stating, “This collaboration not only supports South Africa’s net zero targets but also improves the quality of life in communities through responsible urban development.”
South Africa has pledged to reduce its greenhouse gas emissions by 42% by 2025 and achieve net zero by 2050. Conventional buildings are responsible for up to 40% of global energy-related emissions, making sustainable construction an essential component of national climate policy.
The project will also benefit from a performance-based incentive (PBI) mechanism through the UK-IFC Market Accelerator for Green Construction (MAGC) Program. The incentive will subsidize certification and greening costs for developers, easing the financial burden of compliance and promoting wider adoption.
Since 2020, IFC has mobilized $2.4 billion for sustainable development in South Africa, with a key focus on renewable energy and green building sectors.
Strategic significance lies in the dual impact of this initiative, which promotes ESG compliance in real estate finance while tackling the urgent demand for affordable housing. It signals a scalable model for sustainable urban development in emerging economies and strengthens South Africa’s climate resilience pathway.
ESG BROADCAST will continue monitoring the updates related to this topic. Stay tuned to be updated on the related policy and pivotal regulatory shift.
