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International Finance Corporation to invest in HDFC

World Bank’s International Finance Corporation (IFC) will make a debt investment of up to $250 million (approximately Rs 1860 crore) in Housing Development Finance Corporation (HDFC). The loan proceeds will be used to provide retail buyers financing for affordable housing with a mutually agreed portion of IFC funding to be earmarked for green affordable housing.

Specifically, IFC will advise HDFC on many aspects of the affordable green housing segment including its potential and impact, the certifications and potential pipeline of projects, as it continues to build a commercially viable green affordable housing asset class.

The project will also support HDFC in gradually growing its nascent green housing portfolio. Beyond the project, IFC anticipates that the investment, together with other IFC’s efforts in the segment, will help promote greater competitiveness in affordable housing financing via demonstration and replication channels.

Under the partnership, IFC will share global best practices in affordable and green building financing by conducting workshops/case study walk throughs from other countries and support HDFC’s capacity building exercises for the Company to successfully identify and expand into this affordable green housing segment.

The World Bank unit has an active LP (limited partner) portfolio in India and makes direct private equity-style investments as well as lends to companies.

In May, the World Bank unit proposed a loan of up to $50 million (Rs 354 crore) for Rabobank to help the Dutch cooperative bank fund agriculture and renewable energy projects in India.  Recently, IFC committed an equity investment of up to $15 million in a India-focused clean energy fund managed by GEF Capital Partners.

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