South African affordable sustainable residential property development company TUHF announced on Monday that it had partnered with the International Finance Corporation (IFC), part of the World Bank group. Under the partnership, the IFC had granted TUHF a loan of $54-million (about R960-million). The IFC loan will be channelled through an up to R1.2-billion special purpose vehicle, with the additional funding coming from TUHF and third-party lenders.

The purpose of the loan is to both increase access to, and promote the use of, green construction practices in the creation of affordable housing. The money will be used by TUHF to help finance mainly small and medium-sized enterprises (SMEs) to develop green-certified affordable rental buildings in the country’s townships and inner cities.

“Our partnership with IFC underscores TUHF’s dedication to delivering sustainable, affordable housing solutions that address socioeconomic and environmental challenges – in other words, sustainable impact – in South Africa’s urban landscape,” highlighted TUHF CEO Paul Jackson. “Together, we aim to empower property entrepreneurs, improve livelihoods, and set new benchmarks for sustainable impact investing in the housing sector.”

The IFC will also supply advisory services to the South African company, to strengthen its capacity to originate and manage loans for certified green buildings. Further, the IFC and French development finance institution Proparco (which is focused on strengthening the contribution of developing country businesses to the achievement of the UN Sustainable Development Goals) have supported the development of an environmental, social and governance (ESG) system for TUHF, which will allow it to better monitor and report on ESG outcomes. TUHF has a focus on ESG principles, which strengthens its wider commitment to impact investing and transformation.

“IFC’s partnership with TUHF represents IFC’s commitment to innovative finance, job creation, and sustainable and climate-friendly economic growth,” affirmed IFC VP for Africa Ethiopis Tafara. “Together, we will provide SMEs with opportunities for growth and create much-needed job opportunities, contribute to inner city rejuvenation and affordable rentals for low-income communities, and help set green standards for housing in South Africa.”

The TUHF-IFC partnership is also being supported by the Market Accelerator for Green Construction (MAGC) programme. MAGC is a joint initiative of the IFC and the UK government, and is focused on emerging markets. The MAGC is providing performance-based incentives (PBIs), totalling $7.8-million, to support TUHF end-borrowers who are retrofitting or converting existing buildings, an approach that reduces embodied carbon. These PBIs will reduce the amounts of loans that South African property-developing SMEs will have to take out. (TUHF also supports new construction that meets stiff green building standards.)

“As TUHF operationalises the partnership, we remain focused on our mission to foster financial inclusion, urban regeneration, and sustainable impact,” stated Jackson. “With the IFC’s backing, TUHF is uniquely positioned to showcase its leadership as a South African impact investor, combining both social and environmental outcomes to build thriving, inclusive cities.”

Since it was founded in 2003, the company had provided finance totalling more than R8.3-billion, resulting in the creation of more than 50 000 affordable rental units. In the 2024 financial year alone, the company oversaw the delivery of 3 043 affordable housing units, which became homes for at least 9 130 people.