The financing includes a direct loan from the AfDB of $58 million and another concessional loan of $10 million from the Canadian Climate Fund. The Canadian fund will also be channeled through the ADB.
The local currency loan size is Rs 508 crore.
This is IIFL Home Finance’s first loan from the AfDB or any other development finance institution, Managing Director Monu Ratra told ET.
The blended cost of the fund is around 8.1% per year, he said.
“The AfDB financing will help us improve the penetration of affordable green housing in India’s deeper markets and fulfill the dream of many Indian families of owning their own home,”
The loan will be split into two tranches, an AfDB spokesperson said, responding to questions from ET. Of this amount, Rs 433 crore is earmarked for loans to female borrowers or co-borrowers from low income groups with a particular focus on India’s lagging states, and for mortgages on certified green affordable housing.
The balance of Rs 75 crore is intended to be loaned to developers for the construction of certified green affordable housing, the spokesperson said. This should encourage developers to adopt green certification standards in the construction of affordable housing.
ADB already has an existing link with IIFL Home Finance to promote green housing initiatives in India aimed at reducing carbon emissions and conserving water and energy.
Buildings contribute about 35% of carbon emissions and the vast majority of the housing stock is yet to be built in India. Domestic units can be designed in accordance with climatic requirements and improve carbon efficiency.
IIFL Home Finance provides affordable home loans to economically weaker sections, Low Income (LIG) and Middle Income (MIG) groups in line with the government’s Housing for All effort.
The lender had assets under management of Rs 22,207 crore at the end of December last year, three quarters of which were home loans averaging Rs 17 lakh. He aims to take his book to Rs 30,000 crore by March 2023, Ratra said.