International Finance Corporation (IFC) is providing debt funding to the tune of $85 million to Dewan Housing Finance Ltd (DHFL) to expand finance for affordable and energy-efficient housing in India, according to a press statement.
IFC had early this year disclosed it may lend up to $70 million to the housing finance firm besides additional commitment from the Canada Climate Change Program (CCCP) where IFC will act as an implementing entity for CCCP to support climate change investments.
It has now said the overall funding involves $70 million through external commercial borrowing by IFC and $15 million to finance green mortgages under the IFC-CCCP.
DHFL will use the money for green mortgages which will reduce 6,200 tonnes of carbon emissions per year, as per the statement issued on Wednesday.
"IFC’s investment will demonstrate the viability of offering housing finance to low and middle income clients. IFC's support to Dewan is a recognition of the company's track record in serving this segment," said Kapil Wadhawan, chairman and MD of DHFL.
“Promoting housing finance is one of the key priority areas for IFC in India, especially in India's low income states. By demonstrating the benefit of green homes, the project is expected to help home buyers in low and middle income segments buy affordable energy-efficient homes," said Serge Devieux, IFC director for South Asia.
Established in 1984, DHFL is now the second largest private housing finance company in India. It offers both housing loans (house purchase, construction, extension and project loan) and non-housing loans (loan against property, lease rental financing and purchase of commercial premises).
Last month, WestBridge Crossover Fund part exited the company by selling 1.77 per cent stake through the open market. In July this year, DHFL and its promoter group companies entered into a definitive agreement to acquire 74 per cent stake in New Delhi-based DLF Pramerica Life Insurance Co Ltd for $31.95 million.
IFC has a long-term partnership with DHFL over the last decade. In 2003, IFC lent around $12.5 million to the company and also co-invested in Aadhar Housing Finance, a company jointly promoted by DHFL Group and IFC, which provides affordable home loans to low income borrowers.
In another deal, IFC is also separately lending $125 million to Yes Bank.
(Edited by Joby Puthuparampil Johnson)