Green, Affordable Housing Finance



A green mortgage instrument that provides data-driven alternative credit assessments for IFC-EDGE certified green homes to underwrite borrowers with low and informal incomes. 

The Problem 

The market for affordable housing in Kenya remains critically constrained, with borrowers on low and informal incomes unable to secure finance. Simultaneously, banks seeking housing collateral are often highly conservative in their opinion of housing construction, with a strong preference towards traditional buildings and a lack of confidence in the value of climate-smart homes. In the face of this subdued demand and absence of incentivization within the market, the delivery of energy-efficient, low-carbon affordable housing is inhibited by immature supply chains and risk-averse housing ecosystems. 

The Solution 

Green, Affordable Housing Finance combines data-driven alternative credit assessment with IFC’s green building certification to unlock the market for affordable green mortgages in Kenya. In doing so, proponent Reall aims to demonstrate green building market viability, precipitating a transformation of the building sector while facilitating the creation of new green jobs. 

“Today Kenya needs 2 million homes, and with a young population, Kenya’s cities are growing fast. We want this growth to work for low-income people and the planet by introducing innovative credit assessment tools for green, affordable homes. 70% of buildings in 2050 in Africa and Asia have yet to be built. Working with the Lab, we want to demonstrate that climate-smart affordable homes are an untapped $17 trillion sustainable investment opportunity,” –  Ian Shapiro, Chief Executive at Reall. 

Target Impact 

According to Reall, even with a conservative estimate of 20 tons of lifecycle carbon per home, 30 million tons of CO2e potentially would be avoided in meeting Kenya’s 2-million-unit housing deficit. The proponent is looking to tap into an estimated USD 1 billion annual mortgage lending opportunity in Kenya.