In a strategic move to scale up green affordable housing in India, IFC has committed up to $150 million as an anchor equity investment in the H-DREAM Fund, managed by HDFC Capital Advisors. The fund, with a target corpus of $1 billion (Rs 8,700 crore), will support sustainable affordable and mid-income housing projects in urban India. 

HDFC Capital, a subsidiary of HDFC Bank, will manage the fund, which includes a $500 million green shoe option. Projects financed through the fund will adopt IFC’s EDGE green building standards and target the development of at least 25,000 green housing units. The initiative is expected to mobilise up to $850 million in additional long-term capital. 

With India facing a housing shortfall of around 18 million units in Tier 1 and Tier 2 cities, the initiative aims to address a pressing social need while promoting sustainability. The residential buildings sector alone accounts for nearly 24 per cent of electricity use globally. 

“Our partnership with IFC will channel global and domestic capital to address India’s basic housing need. We already have in-principle commitments of around $350 million,” said Vipul Roongta, MD & CEO, HDFC Capital. 

Deepak Parekh, Non-Executive Chairman, HDFC Capital, added, “The H-DREAM Fund integrates sustainability with financing, which will go a long way in addressing the housing gap and building resilient communities.” 

“Green affordable housing delivers a dual impact. By supporting green finance instruments and sustainable projects, we aim to improve urban liveability and set benchmarks for India’s housing sector,” said Imad N Fakhoury, Regional Director for South Asia, IFC. 

The fund adopts IFC’s Environmental & Social Performance Standards and the EDGE framework to ensure sustainability remains central to every project.