International Finance Corporation’s EDGE certification has long provided financial benefits to commercial buildings, but there is a new growing body of evidence that they also provide returns to residential developers. With the marketing differential that EDGE certification provides, green developers are able to speed up their sales cycles with reduced costs of financing. As one example of this, Vietnam’s Capital House sold their homes 20% faster than the average, which reduced their financing costs by 3%. A key factor in these quick sales were the projected 30% reduction in utility consumptions, and therefore costs, along with only a 1% increased construction cost.
Governments can also play important roles in catalyzing green development by increasing home buyer’s purchasing power while incentivizing green construction, and by promoting non-fiscal incentives. In Vietnam, IFC trained over 1,000 construction industry professionals and created checklists for inspectors and technical guidance, making enforcement clearer and more efficient.
Source:
EDGE Buildings. (n.d.) EDGE Certification: Developers. Link: https://edgebuildings.com/marketplace/developers/#toggle-id-11
International Finance Corporation. (2019) Green Buildings: A Finance and Policy Blueprint for Emerging Markets. IFC.
Link: https://www.ifc.org/en/insights-reports/2019/green-buildings-report
Musić, R. (2021) Building the business case for green affordable housing. Enterprise Development & Microfinance. 32(3): 179–192. Link: https://doi.org/10.3362/1755-1986.21-00013