I NTERNATIONAL C ONFERENCE ON
G ROWTH WITH S TABILITY IN
A FFORDABLE H OUSING M ARKETS
January 29st to February 1st, 2012
New Delhi
W HAT DOES IFC MEAN
BY ‘G REEN B UILDINGS ’?
We define green building as the practice of
increasing the efficiency with which buildings
use resources such as energy, water and
materials while also reducing the building’s
impact on human health and the environment.
E XACTLY, W HAT IS A
“G REEN H OME ”?

Homes designed to create savings
of at least 20% from non-energy
efficient homes

Homes that use 20% less water,
20% less energy or 20% less or
more efficient building materials

Design techniques can be as simple
changing the exposure of the
home which translate into energy
savings
Some Green
Building
Techniques
• Drainage, elevation, exposure
• Off-site Fab Materials
• Insulation
• Roofing materials
• Lower use of cement
• Rainwater harvesting systems
• Solar heating systems
W HY B OTHER ?
Homes account for about 21 percent of our greenhouse emissions, so the
potential savings and reduction in emissions is “low-hanging” fruit.
The homeowner gets a home that:

is cheaper to operate over the long-term;

more comfortable to live in, better indoor air quality and healthier
environment;

higher property value;

Can have less expensive financing;

More sustainable materials mean that periodic maintenance is reduced.
Many governments provide financial incentives, including subsidies, thus
spending less for energy generating capacity.
Society benefits by consuming less non-renewable energy resources and by
consuming power to live comfortably at cheaper all-in cost.
W HY ARE “G REEN ” H OMES
I MPORTANT FOR INDIA ?

There is a has huge housing deficit (26 million and
rising) – mainly in low income bracket

Resource efficiency – resources are scarce!

Almost a third of India’s electricity is used in buildings

Weather conducive to solar power

Important for energy security

Way of the future – less expensive on new building
than retrofitting existing buildings
Mapping Macro drivers: Where is the biggest
demand for Green Housing?
Economic driver
percentage cost of electricity vs. GDP [%]
IFC’s approach to addressing challenges is tailored to the needs of specific market contexts, prioritising counties with
high CO2 from buildings, high cost of electricity and high urbanization
Urban populace
added each year
[In millions]
Kyrgyzstan
High
Priority
High Cost but
low carbon grid
Mozambique
1 5
Jamaica
Nicaragua
Pakistan
Dominican
Republic
Vietnam
Philippines
Bulgaria
Ghana
Gambia
Syria
Slovakia
Azerbaijan
Croatia
India
China
Tajikistan
Uzbekistan
Jordan
Brazil
Honduras
Cameroon
Malawi
Paraguay
Zambia
Ethiopia
El Salvador
Costa Rica
Peru
Low Priority
Haiti
Egypt
Sri Lanka
Panama
Colombia
Uruguay
Kenya
Morocco
Argentina Ecuador
Thailand
Guatemala
Russia^
Angola
Ivory
Coast
Mexico
Bolivia
Nigeria
Trinidad
South Africa
Lebanon
Senegal
Bangladesh
Sudan
Togo
-
Turkey
Zimbabwe
Tanzania
Ukraine^
Cape Verde
Why “electricity”?: The largest amount of energy used by buildings is in the form of electricity.
Typically 20-40% of the electricity generated in a country is used by the buildings sector.
^ Russia and Ukraine have a net decreasing urban population
Eritrea
Indonesia
Low cost but
high carbon grid
Environmental driver
CO2 from electricity generation [gCO2/kWh]
10
15
NATIONAL HOUSING BANK/IFC/WORLD BANK
STUDY: GREEN INTERVENTIONS FOR
AFFORDABLE HOUSING
Tier I - incorporate as low or zero cost improvements




Energy efficient ceiling fans
Passive solar features for thermal comfort , natural ventilation
and optimized orientation
Dual-flush toilets; water-efficient fixtures and flow restrictions
Natural methods of decentralized water treatment systems and
energy efficient water pumping systems
Tier II – incorporate as far as possible as short pay-backs



Efficient lighting
Solar water heaters
Rainwater harvesting and storage systems
W HY FINANCE G REEN
BUILDINGS ?

Green buildings have documented higher value because of
potential utility savings, lower operating costs and more
comfortable/healthier living

Product Niche / Branding - Advantage in marketing as distinguishes
them in the market

Get ahead of coming government standards

Reduced risk - Improved loan performance (since socially
responsible homeowners tend to have better on-time payment
records)

For mortgage lenders - adds to suite of mortgage products and
encourages cross-selling → leads to first mover advantage!
W HAT IS A GREEN
MORTGAGE ?

The Green Mortgage is an
additional credit facility to the
home buyer of a home that has
eco-technologies that generate
savings in household expenditure
by the decrease in consumption
of electricity, water and gas.

Options for NHB/HFCs:
•
Increase loan amount to
accommodate additional
equipment costs
•
Provide reduced interest
rates to ‘neutralise’ extra
cost of additional
equipment
Example Calculation
Energy saving
Rs.117/month
Additional EMI
Rs.66/month
Net saving during
Rs.50/month
the loan period
Assumptions:
Homes costing Rs 10 lakh, Package of measures: Solar DHW
& Duel flush WCs ,Additional capital cost Rs.15,000 . 15-year
loan term
Green Mortgages: Mexico Case Study
•The Infonavit”s* Green Mortgage Program was initiated in 2007, to provide an extra credit to buy new
houses which incorporate sustainable and energy efficient technologies, such as Solar water heaters,
water saving faucets, and thermal insulation, among others.
• The Program targets state-aided house buyers with low-income. The program Applies to homes that
cost less than 43,000 USD and can be located in any state in the country.
• The Green Mortgage beneficiaries are able to obtain a higher loan depending on the increase in their
ability to pay, derived from energy and water savings that generate the installation of eco-technologies in
a dwelling. The additional credit amount can cover the cost of installing clean technologies.
•Impacts (energy and water saved) are measured depending on the different bioclimatic zones .
GREEN MORTGAGE MODEL
Green Criteria
•Site
•Materials
•Health
•Energy
•Water
•Community
Savings
•Energy
•Water
•Gas
Higher capacity to
pay
Higher
loan
amount
Loan increased
+
GREEN MORTGAGE
=
$16,000
RESULTS
In 2010, 100,025 green houses
financed
In 2012, all Infonavit mortgages
will be Green Mortgage
10
HOW CAN IFC HELP?
Advisory

Audits, technical assistance (benchmarking)

Policy and regulatory support

Sector Studies (Affordable Green Housing for
India)
Investment

Direct lending, guarantees, equity investments

Concessional financing available
An Example of IFC Advisory Services
Advice on Green Building Regulation for Indonesia
Indonesia is one of the world’s largest greenhouse gas emitters with its building
sector accounting for more than a quarter of total energy use in 2004 – a number
that’s expected to rise to nearly 40% in the next two decades.
In response, IFC is helping the government of the capital province, Jakarta,
develop a green buildings code. The code sets energy and water efficiency
requirements for large commercial and high-rise residential buildings, and will
require climate change adaption practices to be included in building designs.
IFC's main aim was to help create a code that is simple to implement, effective
and easy to monitor. A key element of the analysis involved modelling a range of
possible changes for each building type which met clear criteria for market
preparedness and ease of implementation while maximizing the benefits of
energy (CO2) and water reductions in a cost-effective manner.
The details of the code have been developed in close consultation with
government as well as private sector stakeholders including, developers,
landlords and professional associations.
Green Buildings Code* for
Jakarta has a potential carbon
reduction of 3MtCO2/year by
2020.
“…with effective implementation of the green buildings code in
Jakarta, the city can serve as a model for implementation in other
cities in Indonesia.” Fauzi Bowo, Governor Jakarta Province
IFC’ S G REEN BUILDINGS
TOOL
Get screen shot from Prashant
• Marketing tool -Easy to use tool to
demonstrate net
savings to home
buyers
• Builder tool –
Vendors can select
different EE
products and
analyze impact on
costs
• Populated with
current data based
on averages for
each country
What is the cost impact? Example Payback Assessment
Green Building Measure
%Saving
Cost
increase
Payback
period
Action
8.0%
Negative
0
Include
17.3%
7.2%
25.0
Consider
0.5%
0.0%
4.8
Include
0.3%
0.5%
98.6
Exclude
0.2%
Negligible
-
Include
0.1%
0.0%
18.1
Consider
7.3%
0.1%
0.9
Include
11.4%
1%
5.4
Include
0
Include
•
•
•
•
•
•
•
Window to wall ratio
Solar Shading Devices
Reflectivity - Wall
Thermal Conductance (Wall U-Value)
Reflectivity – Roof
Thermal Conductance – (Roof U-value)
Glazing Assembly Properties (U-value, SHGC, VLT)
•
COP of air conditioning equipment
•
Variable Speed Drives for cooling towers
9%
0%
•
•
Heat recovery on extract air
Solar collectors for Hot water
2%
Cost awaiting
26.2
Consider
NA
NA
---
Exclude
•
Photo electric control perimeter lighting
18%
2%
7.4
Include
•
Exterior lighting controls
NA
NA
---
Exclude
•
•
•
Low energy lighting [CFL, T5, LEDs etc]
Electronic Ballast
Sub-metering benefits
7%
0.12%
1.0
Include
2%
Negligible
0.0
Include
3%
NA
NA
Consider
•
Water efficient fittings
40%
0.35%
6.0
Include
•
Rainwater harvesting
15%
Cost awaiting
26.2
Consider
•
Recycling onsite Sewage T plant
67%
Cost awaiting
7.4
Consider
•
Water metering
NA
Negligible
NA
Include
•
Storm water attenuation and ground water recharge
NA
Minimal impact
NA
Include
The energy saving potential of each measure has been correlated with the cost impact
and therefor the simple payback.
CONCLUSION

NOW is the time to act given:

The extreme housing deficit in India and the
predicted growth of the deficit;

Retrofitting is more expensive than incorporating
the measures in new buildings;

Get ahead of almost certain future regulatory
requirements.
T HANK Y OU FOR YOUR
ATTENTION !
For more information, please contact:
Debra Perry
International Finance Corporation,
Climate Business and Sustainably Group
dperry@ifc.org
+1 202 473 8150