Financial services provider Absa, in collaboration with the International Finance Corporation (IFC), has launched a new initiative within the South African residential market aimed at promoting sustainable green living. 

This three-year initiative, which takes the form of a rebate to customers, is expected to support prospective homeowners with the purchase of green-certified homes through the UK-IFC Market Accelerator for Green Construction (MAGC) programme. 

The MAGC programme provides blended concessional finance and advisory support to catalyse the development of green buildings across emerging markets.  

Customers who buy properties valued at less than R5-million directly from an Absa-approved Eco Home Loan development are now eligible to receive between 1.5% and 3% of their loan amount back in a rebate.

This incentive will be credited directly into the customer's home loan account and capitalised against the outstanding balance, thus reducing their loan amount and saving them further interest over the term of their mortgage. 

"We are thrilled to be the first South African bank to introduce such a rebate in the residential property market.

"This initiative is not just about promoting green living. It's about being a catalyst for an industry-wide shift towards sustainability. By incentivising the purchase of eco-friendly homes, we are paving the way for a more sustainable future and demonstrating our commitment to our environmental, social and governance goals,” says Absa Home Loans managing executive Nondumiso Ncapai.

Absa introduced South Africa’s first Eco Home Loan in collaboration with Balwin Properties in 2020, offering customers who purchase properties in Excellence in Design for Greater Efficiencies- (EDGE-) certified developments a rate concession of 0.25% on their mortgages.

The EDGE standard sets minimum thresholds for energy and water consumption savings for homes to be classified as eco-friendly.

In addition to this 0.25% rate concession, qualifying Absa customers now stand to save further on their EDGE-certified homes.

This initiative is part of Absa's broader commitment to sustainability and is an extension of a range of home loan products designed to provide customers with access to housing that reduces their carbon footprints and promotes eco-friendly living.

This residential property rebate is part of a R4.5-billion deal between Absa and the IFC. The IFC estimates that the broader project has the potential to reduce South Africa's yearly emissions by over 12 000 t, marking a substantial environmental impact. 

“The IFC is dedicated to supporting access to eco-friendly and resource-efficient residential options in South Africa as a measure against climate change, to safeguard the environment, and to bolster economic growth.

"Our partnership with Absa will help promote green housing as an option for prospective homeowners,” says IFC country manager for South Africa Adamou Labara.