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December 2015
Housing
D
BSA’s Green Fund managed
on behalf of the National
Department of Environmen-
tal Affairs (DEA) has earmarked a
R120million concessionary loan fund-
ing pool, which will be administered
by Nedbank.
The agreement between Nedbank
and DBSA’s Green Fund will enable
the development of sustainable green
housing in the affordable housingmar-
ket. The agreement also includes the
monitoring of energy and water con-
sumption in green affordable housing
units to verify the actual savings.
“Green affordable housing com-
bines social and environmental sus-
tainability to promote access of lower
tomiddle income individuals to better
quality housing units with lower run-
ning costs. This captures the spirit
of Nedbank’s Fair Share 2030 initia-
tive, recognising that in order to be
a thriving bank, we need to operate
in a thriving society,” says Manie
Annandale, Head of Affordable Hous-
ing Development Finance at NCIB.
The 400 units in Gauteng and the
Western Cape will not only provide
housing but local industries will be
stimulated through the increased
demand for green housing technolo-
gies. This includes creating new job
opportunities with the demand for in-
sulation, efficient lighting, heat pumps
and solar water heaters.
“Funding initiatives such as this are
meant to support South Africa’s efforts
to move towards a greener economy,
which is a priority focus area for the
DBSA’s Green Fund. The partnership
with Nedbank’s Affordable Housing
Affordable green housing
In a pioneering move, Affordable Housing Development Finance
at Nedbank Corporate and Investment Banking (NCIB) and the
Development Bank of Southern Africa (DBSA) Green Fund, concluded
an agreement to jointly fund the development of 400 affordable green
housing units in the Western Cape and Gauteng.
Unit makes it possible to fund in-
novative affordable housing projects
which contribute towards achieving
the objectives of theNational Develop-
ment Plan,” saysMohaleRakgate, Gen-
eral Manager for Project Preparation
Development unit at the DBSA.
A typical household in the afford-
able market earns up to R20 000 per
month with bond instalments averag-
ing R6 500 for a R620 000 home utilities
representing almost 40-50% of the
gross income. This places pressure
on the home owner in terms of afford-
ability. “Above-inflation increases in
electricity tariffs will erode affordabil-
ity further in years to come. Meaningful
savings in electricity and water bills
can reduce the likelihood of default
on rentals or bond payments, and help
to improve access to housing for new
market entrants,’’ says Annandale.
In South Africa, the new bench-
mark for environmentally sustainable
housing is the EDGE (Excellence in
Design for Greater Efficiencies) tool.
It was developed by the International
Finance Corporation (IFC) for appli-
cation in developing economies and
was recently adopted by the Green
Building Council of South Africa
(GBCSA). This forms the basis for a new
green housing certification system.
Compliance requires savings of at
least 20% in each of three categories
namely; energy, water and building
material embodied energy. It is an-
ticipated that a family of four living in
a new two bedroom unit, compliant
with EDGE and SANS 10400-XA, could
save as much as R350-450 per month,
compared to an older conventional
unit with no energy efficiency features.
Once savings are demonstrated, it
is anticipated that property develop-
ers will be able to recover the green
construction premium from residents
by sharing in the operational savings,
either through marginally higher sell-
ing prices or rentals. In the case of
housing sales, mortgage lenders will
play a critical enabling role by taking
into account the likelihood of lower
operational costs in their assessment
of home loan applications relating to
units in green developments.
Fair Share 2030 is Nedbank Group’s
business response to a series of
economic, social and environmental
challenges that threaten society’s
long-term success. It represents an
annual flow of money to be lent in a
way that contributes to meeting eight
major long-term goals for the future.
The goals relate to the provision of
affordable energy services.
■
Tlou Ramaru, DEA Chief Policy Advisor: Sustainable Development with Manie
Annandale of Nedbank and Mohale Rakgate from DBSA.