Marking an important milestone for the Trust for Urban Housing Finance (TUHF), the financier has partnered with the International Finance Corporation (IFC) to expand affordable housing and advance green construction in South Africa.
The collaboration strengthens TUHF’s impact agenda, taking its green finance initiatives to new heights while positioning it as a leading impact financier delivering social and environmental outcomes.
IFC’s up to R960m (equivalent to $54m) loan to TUHF will drive inclusive, sustainable urban development by supporting the company to finance mostly small and medium enterprises (SMEs) to develop affordable green-certified rental buildings in South Africa’s inner cities and townships.
Its investment will be channeled through an up to R1.2bn special purpose vehicle, with additional funding to be contributed by TUHF and third-party lenders. The local currency loan protects South African borrowers from the negative effects of exchange-rate fluctuations, and its long-term nature ensures financial sustainability while maximising impact.
This initiative further cements TUHF’s objective of building a Sustainable Impact Bond approach – one that delivers on both social and environmental impact while ensuring financial inclusion and long-term resilience.
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“Our partnership with IFC underscores TUHF’s dedication to delivering sustainable, affordable housing solutions that address socio-economic and environmental challenges – in other words, sustainable impact – in South Africa’s urban landscape,” said Paul Jackson, chief executive officer of TUHF.
“Together, we aim to empower property entrepreneurs, improve livelihoods, and set new benchmarks for sustainable impact investing in the housing sector.
“IFC’s partnership with TUHF represents IFC’s commitment to innovative finance, job creation, and sustainable and climate friendly economic growth,” said Ethiopis Tafara, IFC vice president for Africa. “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.”
Additionally, IFC will provide advisory services to enhance TUHF’s capacity to originate and manage loans for certified green buildings. The introduction of an ESG system, developed with support from the IFC and Proparco, will further strengthen TUHF’s ability to monitor and report on ESG outcomes.
Supporting green and inclusive growth
This partnership will be supported by the Market Accelerator for Green Construction (MAGC) programme, a collaboration between IFC and the UK government to promote green construction in emerging markets.
TUHF’s projects will align with the programme’s objectives by prioritising retrofitting and converting existing buildings, reducing embodied carbon, and constructing new developments that meet stringent green building standards. Retrofits and conversions will qualify for a performance-based incentive (PBI) funded by MAGC.
The MAGC provided PBIs, totaling $7.8m, that are designed to support TUHF’s end borrowers, who often operate in high-risk or underserved areas. These incentives will directly reduce loan amounts, making sustainable development more accessible to South Africa’s SME property entrepreneurs.
Driving impact with ESG excellence
The IFC partnership also complements TUHF’s focus on Environment, Social, and Governance (ESG) principles, reinforcing its broader commitment to transformation and impact investing. By incorporating green finance into its core operations, TUHF facilitates urban densification and combats sprawl, enabling tenants to access affordable rental housing near economic hubs and amenities.
In its 2024 financial year, TUHF delivered around 3,043 affordable housing units, creating homes for more than 9,130 people and bringing its total delivery since inception in 2003 to over 50,000 units. This collaboration with the IFC is expected to significantly increase these numbers, creating job opportunities and stimulating local economies, while supporting objectives to reduce carbon emissions within South Africa’s inner cities and suburban areas.
“As TUHF operationalises the partnership, we remain focused on our mission to foster financial inclusion, urban regeneration, and sustainable impact. 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,” concludes Jackson.
