An Estimated $24.7 Trillion Investment Potential in Green Buildings by 2030, Says IFC Report
India will need an estimated 60 million additional housing units between 2018 and 2022, predicts IFC
December 6, 2019
The International Finance Corporation (IFC), a member of the World Bank Group, has come out with its latest report that sheds light on the enormous potential of green buildings in emerging markets.
Green buildings reduce or eliminate negative impacts on the environment and climate. They can be tied to carbon and energy objectives such as net-zero emissions, as well as considerations for people’s health and well-being.
Investing in green buildings allows market players to manage potential risks that stem from the global transition to low-carbon economies. Globally, the buildings sector consumes more than half of all electricity for heating, cooling, and lighting and accounts for 28% of energy-related greenhouse-gas emissions, according to the IFC.
The report, titled “Green Buildings: A Finance and Policy Blueprint for Emerging Markets,” notes that by 2030, in emerging markets alone, green buildings will offer a $24.7 trillion investment opportunity, which will spur economic growth and accelerate sustainable development.
The report highlights the financial benefits that the investors, banks, developers, and owners, including governments, can expect when entering the green building market.
The estimated $24.7 trillion investment potential in green buildings between 2018 and 2030 in emerging market cities will be mainly due to the sharp increase in building construction expected over the next few decades and the opportunity to ensure that these buildings are built green.
The report notes that there is a strong business case for growing the green buildings market. Emerging evidence indicates that green buildings, or buildings that use energy and water more efficiently, are a higher-value, lower-risk asset than standard structures. While building green could range from savings of 0.5 to 12% in additional costs, green buildings can decrease operational costs by up to 37%, achieve higher sale premiums of up to 31% and faster sale times, have up to 23% higher occupancy rates and have higher rental income of up to 8%.
As per the report, more than half of the 4.1 billion people projected to live in urban areas by 2030 are expected to be in South Asia and the East Asia Pacific regions, and their accommodation will require additional residential and commercial building floor space. The East Asia Pacific region alone will present an investment opportunity of $16 trillion in green buildings.
In India, the situation is no different, as it alone will need an estimated 60 million additional housing units to be built between 2018 and 2022 to meet the existing shortfall. To meet the demands, the Indian government has launched “Housing for All” by 2022, a policy that aims to bridge the gap in urban housing with increased private sector participation.
It is important to note here that since December 2015, 194 countries have submitted national plans that highlight the governments’ framework for reducing emissions through climate solutions, including renewable energy and low-carbon cities.
The report adds that India’s National Development Council is focused on the building sector based on energy conservation, pledging to make its Energy Conservation Building Code (ECBC) stricter, highlighting its domestic building rating system GRIHA (Green Rating for Integrated Habitat Assessment), which scales energy efficiency in buildings.
The best way to reduce the use of conventional resources during a building’s life is to integrate green measures during its design and construction. For example, India updated its Energy Conservation Building Code (ECBC) for commercial buildings in 2017 and its ECBC-R for residential buildings in 2018. The ECBC now includes energy performance standards for commercial buildings, requires renewable energy sources to be integrated into building design, and makes it mandatory for new buildings to demonstrate energy savings of at least 25% to be code compliant.
India’s Perform, Achieve, and Trade program is a regulatory cap and trade instrument that aims to reduce energy consumption in specific energy-intensive sectors using a market-based mechanism through which consumers can get certification for and trade excess energy savings. The program was initially created for large industrial businesses, but later it was extended to hotels for the year 2020–2021.
The report further notes that the increased uptake of green bonds in several markets is mainly because central banks and regulators are providing clear guidelines on how to issue these bonds.
The People’s Bank of China published its “Green Bond Guidelines” in 2015. Similarly, India, the Association of Southeast Asian Nations, Chile, Peru, and Egypt are only a few other examples of countries that have issued green bond guidelines.
The Indian corporate is also playing its part in promoting green buildings. Led by the CEOs of leading developers and financial institutions, the Sustainable Housing Leadership Consortium is a first-of-its-kind voluntary private sector consortium that aims to mainstream green buildings in India. The consortium is working towards building and certifying all of its new housing as green, contributing 110 million square feet of green housing by 2020.
Earlier this year, according to a smart city indicator survey conducted by Ireland-based multinational, Johnson Controls, India had only 4% of the building that can be classified as ‘green.’ However, the survey pointed out that 38% of buildings in India want to get the ‘green building certification’ in the future as compared to the global percentage of 44. Around 46% are willing to pay a premium to lease space in a certified green building in India as compared to 51% in the world.
Previously, the Bureau of Energy Efficiency and the Central Public Works Department signed a memorandum of understanding kickstarting their cooperation to promote energy efficiency in buildings. The MoU will remain in force for five years unless rescinded by either party. According to the MoU, BEE and CPWD will cooperate on promoting designs and construction of Energy Conservation Building Code (ECBC) compliant new buildings, star rating of CPWD managed buildings across the country with no registration or renewal fee, awareness on energy efficiency in building sector and support for capacity building of CPWD officials in ECBC.
Get the most relevant India solar and clean energy news.
RECENT POSTS
LATEST HEADLINES
Maharashtra Approves Tariffs for 8.7 MW of Solar Power Under KUSUM Program
Mar 21, 2023
Brookfield to Aquire KKR’s 50% Stake in Renewable Developer X-Elio
Mar 21, 2023
NTPC’s Subsidiary Will Develop Renewable Projects for IndianOil Refineries
Mar 21, 2023
Constant Climate-Centric Funding Can Limit Global Temperature Under 1.5°C
Mar 21, 2023
India Voices Concern over Europe’s Carbon Tariff Measure at WTO
Mar 21, 2023
India added 2.5 GW of solar open access in the calendar year (CY) 2022, a year-over-year (YoY) increase of 92% from the 1.3 GW installed in CY 2021, according to the newly released 2022 Q4 & Annual Mercom India Solar Open Acce...
March 15, 2023
Solar
Kerala Issues Empanelment Tender for 100 MW of Solar ProjectsThe Kerala State Electricity Board (KSEB) has invited bids to empanel solar developers to set up 100 MW of grid-connected rooftop and ground-mounted projects. Empanelled vendors also must furnish operation and maintenance (O&M...
March 20, 2023
Tenders and Auctions
Gujarat Invites Bids to Procure 500 MW of Wind Power with Greenshoe OptionGujarat Urja Vikas Nigam (GUVNL) has invited bids to procure power from 500 MW of grid-connected wind projects (Phase V) with a greenshoe option of an additional capacity of up to 500 MW. The last day to submit the bids online is ...
March 17, 2023
Rooftop
MSMEs Adopt Solar Readily If Savings on Power Bills Cover EMI Cost: InterviewSmall businesses are open to adopting rooftop solar if loan repayment is not an additional burden and is equal to their savings on electricity bills. Entities in the commercial and industrial (C&I) segment are increasingly mov...
March 17, 2023
Trending News
Tender & Auctions
Indian Oil Floats O&M Tender for 8 MW Solar Project in Ahmedabad
March 14, 2023
Technology
Researchers Find Solution to Manage Load in Solar PV & Storage Systems
February 28, 2023
February 27, 2023
February 24, 2023
January 17, 2023
Magazine
Grid
Sterlite Bags ISTS Project to Evacuate 20 GW of Renewables in Rajasthan
March 13, 2023
Latest News
The Maharashtra Electricity Regulatory Commission (MERC) has adopted tariffs of ₹3.28 (~$0.039)/kWh, ₹3.29 (~$0.039)/kWh, and ₹3.30 (~$0.040)/kWh for the procurement of 8.7 MW of solar power on a long-term basis. The Commission...
March 21, 2023
Global investment firm Kohlberg Kravis Roberts (KKR) has agreed to sell 50% of its stake in renewable developer X-ELIO to its joint venture partner Brookfield Renewable. Financial details were not disclosed. Since KKR’s...
March 21, 2023
NTPC Limited’s wholly owned subsidiary, NGEL, has entered into a joint venture agreement with Indian Oil Corporation (IOCL) to develop renewable energy projects that can meet round-the-clock power requirements to meet the...
March 21, 2023
Financial support from developed economies to developing nations which is a critical enabler of climate action has been inadequate, said scientists in the latest Intergovernmental Panel on Climate Change (IPCC) report...
March 21, 2023
India has expressed concern about the carbon border measures proposed by the European Union (EU) at a recent meeting of the World Trade Organization’s (WTO) Committee on Trade and Environment. Presenting a paper on the increasing...
March 21, 2023
JSW Neo Energy (JSW Energy) and Greenko KA 01 IREP (Greenko) have won the Power Company of Karnataka’s (PCKL) auction to supply 1 GW of energy for 8 hours daily from pumped hydro storage projects providing continuous 5-hour...
March 21, 2023
Sterling and Wilson Renewable Energy, the solar engineering, procurement, and construction (EPC) arm of Shapoorji Pallonji Group, won NTPC’s tender for the balance of system (BOS) package to develop 1.2 GW (4*300 MW) of solar...
March 21, 2023
Indian Oil Corporation (IOCL) has invited bids for the operation and maintenance (O&M) of an existing 8 MW solar power project at the LPG bottling plant at Sanand in Ahmedabad for five years. The last date to submit the bids...
March 21, 2023
Researchers at the Indian Institute of Technology Mandi (IIT Mandi) have claimed a breakthrough in producing metal oxide layers for use in advanced architecture silicon solar cells using a cost-effective method. This innovative...
March 21, 2023
The government has allowed NTPC to invest in its subsidiary, NTPC Green Energy (NGEL), beyond the limit allowed for a ‘maharatna’ central public sector enterprise (CPSE). The extant guidelines prescribe a ceiling of 30% of a...
March 21, 2023
Get the most relevant India solar and clean energy news.
POPULAR POSTS
Maharashtra Approves Tariffs for 8.7 MW of Solar Power Under KUSUM Program
Mar 21, 2023
Brookfield to Aquire KKR’s 50% Stake in Renewable Developer X-Elio
Mar 21, 2023
NTPC’s Subsidiary Will Develop Renewable Projects for IndianOil Refineries
Mar 21, 2023
Constant Climate-Centric Funding Can Limit Global Temperature Under 1.5°C
Mar 21, 2023
India Voices Concern over Europe’s Carbon Tariff Measure at WTO
Mar 21, 2023
JSW and Greenko Win Karnataka’s Bid for 1 GW of Pumped Storage Projects
Mar 21, 2023
Sterling and Wilson Bags BoS Package Tender for 1.2 GW Solar Projects
Mar 21, 2023