EDGE DISCOVERY WORKSHOP Green Buildings for ......Green Bond Issuance • $400 million program with...
Transcript of EDGE DISCOVERY WORKSHOP Green Buildings for ......Green Bond Issuance • $400 million program with...
EDGE DISCOVERY WORKSHOPGreen Buildings for Financial Institutions
www.edgebuildings.com
Conciliation and arbitration of investment disputes.
Guarantees of foreign direct
investment’s non-commercial risks.
Interest-free loans and grants to governments
of poorestcountries.
Loans to middle-income
and credit-worthy, low-income country
governments.
Solutions in private sector development.
IBRD
InternationalBank for
Reconstruction and
Development
IDA
International Development Association
IFC
International Finance
Corporation
MIGA
Multilateral Investment Guarantee
Agency
ICSID
International Centre for
Settlement of Investment
Disputes
IFC IS A MEMBER OF THE WORLD BANK GROUP________
IFC HAS A FOUR-PART STRATEGY TO SUPPORTGREEN BUILDING GROWTH
________
Further Resource: About EDGE
MARKET CREATION
ADVICE
INVESTMENT
IFC’S OFFER FOR FINANCIAL INSTITUTIONS
Long-term loans, warehousing facilities, guarantees and risk-sharing facilities,
structured finance, green bonds
Support in identifying or developing your investment pipeline, market intelligence, training for loan officers and developers,
sustained technical advice
Global and local marketing campaigns, stakeholder education, capacity building,
technical guidance, promotion of incentives
Further Resource: About EDGE
FINANCIAL INSTITUTIONS ARE CREATING INNOVATIVE AND LOW-RISK FINANCIAL PRODUCTS FOR GREEN BUILDINGS
GREEN CONSTRUCTION GREEN MORTGAGES & LEASES CAPITAL MARKETS
CROSS-SELLING OPPORTUNITY
Further Resource: EDGE Banking Pages
FINANCIAL INSTITUTIONS ARE CERTIFYING THEIR OWN OFFICES
MRCBCHINA
BANCOLOMBIACOLOMBIA
PROCREDITBULGARIA
WORLD BANK GROUPGHANA
Further Resource: EDGE Projects
Green Bond Issuance
• $400 million program with $217 in green bonds.
• 1st issuance in Colombia; 2nd bond was 2.8x oversubscribed with 72 domestic investors.
• Use of proceeds for EDGE-certified green construction and green mortgages.
Marketing & Advice
OFFER FOR DEVELOPERS: variable loan for green construction financing from 0.5% up to 2% less than conventional market rates.
OFFER FOR HOMEBUYERS: discounted rate of 65 basis points for the first 7 years of the loan.
Incentives• 17 events with 300 developers,
supported by a major marketing push.
• Dedicated EDGE Expert to guide projects through certification.
• Expansion into neighboring countries.• Most Sustainable Bank in the World Award by Dow Jones Index. • In 2 years, from no certified green homes, to 10,000 certified units.
CASE STUDY: BANCOLOMBIA USED GREEN BONDS FOR GREEN CONSTRUCTION FINANCING AND GREEN MORTGAGES
Results
Further Resource: EDGE Banking Pages
URBANIZATION DEMAND
POLICY RISKSAND BENEFITS
EXISTING KNOW-HOW
DIVERSIFY INVESTMENT
STRATEGY
GREEN BUILDINGS HAVE A TREMENDOUS BUSINESS CASEFOR FINANCIAL INSTITUTIONS
GREEN BUILDINGS HAVE A $16 TRILLION INVESTMENT POTENTIAL THROUGH 2030
Further Resource: Creating Markets for Climate Business Report
$410 billion opportunity in new buildings, more in retrofits
Eastern Europe
$900 billion opportunity
Latin America
$150 billion opportunity in just a few countries analyzed
Sub-Saharan Africa
$100 billion opportunity in 3 countries analyzed
Middle East
$1.5 trillion opportunity in fast-growing nations
South Asia
$13 trillion opportunity driven by the Chinese market
East Asia
CASE STUDY: INTERNATIONAL HOUSING SOLUTIONS, A PRIVATE EQUITY FUND IN SOUTH AFRICA IS WORKING WITH DEVELOPERS TO GREEN ENTIRE PORTFOLIO
• 1st in Africa to adopt EDGE –winner of international awards.
• Over 7,000 units across 20 projects certifying with EDGE.
• Simple technical features, including passive design.
• Education across the value chain, learning on pilot projects, data collection.
• Incremental costs minimized.
• Sales proposition: save 1 month of rent free.
Further Resource: Green Homes for All
HOW DO DEVELOPERS CHOOSE THE MOST COST-EFFECTIVE OPTIONS TO DESIGN GREEN? AND HOW DO END CUSTOMERS RECOGNIZE THE VALUE?
THE SOLUTION IS EDGE________
20%
① FREE SOFTWARE ② ACHIEVABLE STANDARD ③ VERIFIED GREEN LABEL
Further Resource: EDGE Software Demo
DEFINITION OF A GREEN BUILDING________
20%20%20%20%
CERTIFIABLY GREENAS VERIFIED BY
AN INDEPENDENTTHIRD PARTY
BETTERPERFORMANCE
THAN THELOCAL BASELINE
& 20%
QUANTIFIED IMPACT REPORTING
&
EDGE IS ALIGNED WITH INTERNATIONAL GREEN FINANCE STANDARDSFOR GREEN BUILDINGS
________
• Used by property developers and investors to obtain data on the performance of their investments.
• EDGE can be used completing the Real Estate Assessment or the Developer Assessment.
• ICMA releases the Green Bond Principles as well as guidelines for green buildings.
• EDGE is listed as an accepted certification standard. (See Section E: Certification Standards).
• CBI releases standards for green bonds funding residential or commercial buildings.
• EDGE is included as a qualifying certification system.
THE FREE SOFTWARE SHOWS RETURN ON INVESTMENT FOR RESOURCE EFFICIENCY MEASURES, TAILORED TO LOCAL CLIMATE
________
EDGE IS AVAILABLE ACROSS ALL SECTORS, FOR BUILDINGS OF ALL VINTAGES________
NEW BUILDINGS
HOMES HOSPITALITY•Hotel•Serviced Apt•Resort
RETAIL•Department store•Shopping mall•Supermarket•Big box store•Food store•Airport
OFFICES HOSPITALS•Hospital•Clinic•Nursing home
EDUCATION•Pre-school•School•University•Sports facility•Religious facility
INDUSTRIAL•Warehouse•Light industrial
PORTFOLIO CERTIFICATIONS
EXISTING BUILDINGS &
REFURBISHMENTS
EDGE WEBSITE HAS A LIBRARY OF CASE STUDIES,WHICH CAN BE USED FOR PROMOTION OR PROOF-OF-CONCEPT
CLICK ON LINKS FOR IN-DEPTH PROJECT STUDIES
Ecohome 3 (VNM)Homes by Capital House
Villa del Rio (COL)Retail by ASHMOREAvenida
Hilton Cucuta (COL)Hotel by Hilton
Johnson Controls HQ Asia (CHN)Offices by Johnson Controls
Sakura Montessori School (VNM)School by EMC Education
Komfo Anokye Hospital (GHA)Hospital by ABP
Antananarivo Airport (MDG)Airport by Bouygues and Colas
Esteban Echeverria (ARG)Warehouse by Plaza Logistica
King Hussein Business Park (JOR)Offices by the Business Park
Revolucion 757 (MEX)Homes by FICADE
THE EDGE STANDARD FOCUSES ON THREE CATEGORIES OF RESOURCE EFFICIENCY
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20%20%20%
20%
Further Resource: EDGE Methodology
THERE ARE THREE WAYS TO CERTIFY. REACH AT LEAST 20% SAVINGS IN WATER AND MATERIALS, THEN CHOOSE YOUR ENERGY SAVINGS.
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Further Resource: EDGE Certification
CASE STUDY: ARTHALAND CENTURY PACIFIC TOWER IN THE PHILIPPINES IS THE FIRST ZERO CARBON BUILDING CERTIFIED WITH EDGE
• First in the world to achieve EDGE Zero Carbon certification
• Located in Metro Manila, Philippines
• Project has energy savings of 45% with 100% offsite renewable energy
• ArthaLand is a pioneer in development of sustainable projects that couple innovative design with high quality construction
Further resource: EDGE Case study
AN EDGE CERTIFICATE REDUCES REPUTATIONAL RISK AND CAN BE USED AS A VERIFICATION INSTRUMENT TO SIMPLIFY COMPLIANCE
________
EDGE IS AVAILABLE IN MORE THAN 150 COUNTRIES________
EDGE is focused on emerging markets because of the World Bank Group’s mission.
FINANCIAL INSTITUTIONS ARE CREATING INNOVATIVE AND LOW-RISK FINANCIAL PRODUCTS FOR GREEN BUILDINGS
GREEN CONSTRUCTION GREEN MORTGAGES CAPITAL MARKETS
• Create awareness of affordability• Build technical capacity for
developers• Recognize lower risk rating•Offer discounted financing rate
• Increase allowable loan ratio• Include utility savings in
homebuyers’ income• Attract more responsible
homebuyers with less risk of late payments and loan defaults
• Issue green bonds for new portfolio• Securitize portfolio as collateral• Attract new investors• Expand into new markets
Develop new products: Leasing, REITs
CROSS-SELLING OPPORTUNITY
INVESTMENT CRITERIA AND COMPLIANCE PROCESS________
3-6 MONTHS FOR DESIGN CERTIFICATION
GREEN CONSTRUCTION FINANCE
GREEN MORTGAGE
EMBEDDED INTO LOAN AGREEMENT
CERTIFICATE PROVES COMPLIANCE
IMPACTREPORTING
FOR FINANCIAL INSTITUTIONS ROLLING OUT A GREEN BUILDING PROGRAM, HIRING EDGE EXPERTS IS BEST PRACTICE
① Embedded within the certification process
② Provide design advice to developers andfulfill compliance requirements
③ Ensure certification awarding within the requisite time frame
① Basic or advanced services for developers
② Training for investment officers
③ Comprehensive advisory services agreement with IFC
LEVELS OF TECHNICAL ADVICE POSSIBLE: ROLE OF EDGE EXPERTS:
CASE STUDY: BANCO PICHINCHA IN ECUADOR OFFERS FREE EDGE CERTIFICATION, EDGE TRAINING, AND TECHNICAL ADVISORY SERVICES
CERTIFICATION WORKFLOW FOR DEVELOPERS________
OPERATIONCONSTRUCTIONDESIGN
Submit design documents into the EDGE App
PRELIMINARY EDGE CERTIFICATE OR EDGE
ADVANCED CERTIFICATE
Site visit & as-built documents submitted
in EDGE App
REGISTER
Use the EDGE App for self-assessment &
project registration
• EDGE co-marketing and project study for sales promotion• EDGE Advanced certificate
automatically granted to projects with 40% energy savings
FINAL EDGE CERTIFICATE OR EDGE ADVANCED
CERTIFICATE
•Asset certification does not need to be renewed
Operational data submitted in EDGE
App carbon calculator
ZERO CARBON CERTIFICATE
• Project must have one year of operation & 75% occupancy•Must renew operational
certificate every 2-4 years
CASE STUDY: ROMANIA GREEN BUILDING COUNCIL (ROGBC)’SGREEN MORTGAGE MODEL WITH RAFFEISEN BANK
GREEN MORTGAGE EXAMPLE
•Additional cost of efficiency measures•Costs can be lowered if EDGE
is utilized early in the process
WIN-WIN
TERMS CAN VARY
HIGHER LOAN AMOUNT
•Benefits accrue even on commercial terms, but bank can incentivize adoption
•Lower bills for the borrower•Higher income for the bank
STANDARD BUILDING:STANDARD MORTGAGE
GREEN BUILDING: GREEN MORTGAGE
BASE PURCHASE COST 50,000 50,000
GREEN MEASURES 1,500
20% DOWN PAYMENT (10,000) (10,300)
LOAN AMOUNT 40,000 41,200 3%
RATE 11% 11%
TERM 20 yrs 20 yrs
MONTHLY PAYMENT $413 $425
ENERGY SAVINGS (20)
NET MTHLY PAYMENT $413 $405 -2%
BANK INCOME (YR 1) 4,371 4,502 3%
CASE STUDY: DAVIVIENDA OFFERS A GREEN CONSTRUCTION FINANCING RATE AND A PROMOTIONAL OFFER OF FREE EDGE CERTIFICATION
127 LIVING• Reduction of max 100 basis
points for residential and mixed-use buildings.
• 50% of the cost of EDGE certification.
Further resource: EDGE Banking Pages
CASE STUDY: BANCO PROMERICA IN COSTA RICA OFFERS LOWER INTEREST RATE, LONGER TENOR AND GRACE PERIOD
127 LIVING• Rate: 8.75% green construction
financing rate compared to a normal rate of 9.25%.
• Four years compared to a normal term of three years.
• 24 months compared to a normal grace period of 18 months.
Further resource: EDGE Banking Pages
GOVERNMENT INCENTIVES FOR GREEN BUILDINGS
Further Resource: EDGE Government Pages
Peru: Height Bonus Incentive
Colombia: Exclusion of VAT Brazil: Discounted
Property Tax
Argentina: Exclusion of VATGhana: Lower
Permit Fees India: Extra Floor Area Ratio
Bangladesh: Discounted Rate
CASE STUDY: PROCREDIT IS CERTIFYING A PORTFOLIO OF ITS OFFICES AND PROMOTING GREEN BUILDING FINANCE
• Two Head offices certified: Sofia, Bulgaria and Skopje, Macedonia through a Portfolio certification program.
• Technical measures: efficient building envelope, LED lighting and sensors, renewable electricity.
• Efforts toward Zero Carbon certification and expanding EDGE reach to other country offices.
Further resource: EDGE Projects
IFC WILL EXTEND MARKETING SUPPORT TO YOU AND YOUR CLIENTS
Further resource: EDGE Marketing Toolkit
EDUCATION AND BUY-IN
CERTIFY OWN OFFICES
LAUNCH INVESTMENT
PROGRAM
WORK WITH EDGE EXPERTS
NEXT STEPS AND CALL TO ACTION
Further Resource: EDGE Events Calendar
EDGE ACKNOWLEDGMENTS________
The following major donors have demonstrated their generous support of the EDGE program:
IFC also wishes to express its appreciation to the following donors:
The European Union; the Ministry of Finance of Japan; the Hungarian Export Import Bank; the Canada Climate Change
Program and the Department of Foreign Affairs, Trade and Development Canada; the Royal Ministry of Foreign Affairs of
Denmark and the Danish Green Growth Fund; the Federal Ministry of Finance of Austria; and the Ministry of Foreign Affairs
of Finland. In addition, the support of the GEF-IFC Earth Fund Platform and the Energy Sector Management Assistance
Program (ESMAP) of the World Bank helped seed EDGE.
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To help banks launch a green buildings investment program for green construction finance, green mortgages, and/or green bonds, enabling greater market share and recognition as a “green bank” while reducing risk.
Objective
ADVANTAGES FOR BANKS
WHY EDGE: SUMMARIZING THE INVESTMENT CASE FOR BANKS
Lower investment risk with both developers and homebuyers
Reduce reputational and policy risk
Capture greater market share
Diversify investor base
Achieve recognition
To provide property developers with a competitive advantage through product differentiation, capturing all of the benefits of certification affordability, a streamlined certification process, and association with the World Bank Group brand.
Objective
WHY EDGE: DIFFERENTIATING PROPERTIES THROUGH EDGE CERTIFICATION________
ADVANTAGES FOR DEVELOPERS
Positioning as a first mover in the market with a major marketing and communications push backed by the World Bank Group brand
Potentially higher prices or quicker sales through differentiation
Lowered costs by incorporating EDGE early into the design process
Online certification process from A to Z with the most affordable certification fees and free use of the design software.
Certification reduces reputational risk, satisfies compliance criteria, and communicates value to buyers
To empower homebuyers to benefit from utility savings that can be repurposed and provide financial protection while offering a more comfortable lifestyle and inspiring a sense of doing “the right thing” for the planet.
Utility bill savings that can be repurposed for better quality of lifeObjective
ADVANTAGES FOR HOMEBUYERS
Potential better resale value
Better thermal comfort
Pride in green achievement
WHY EDGE: SUPPORTING A BETTER QUALITY OF LIFE FOR CUSTOMERS________
Less chance of late payments or loan default
EDGE DELIVERS VALUE________
FINANCIAL CALCULATOR
SIMPLIFIED COMPLIANCE
REDUCED PROCESSING
EASY IMPACT REPORTING
WORLD BANK GROUP BRAND
COST EFFECTIVE
GLOBAL CERTIFIERS OFFER TWO DIFFERENT MODELS TO BEST MEET YOUR NEEDS
CERTIFICATION PRICE PER M2 MINIMUM
0-25,000 FLOOR AREA (SQM) $0.27 $2,250
25,000-50,000 FLOOR AREA (SQM) $0.22 $6,750
> 50,000 FLOOR AREA (SQM) — $11,000 Flat Fee
PROJECT TYPE CERTIFICATION DESIGN AUDIT FINAL AUDIT TOTAL
Residential (up to 100 units| 3 unit types) $2,400 $4,000 $4,000 $10,400
Commercial (single end use) $2,400 $4,000 4,000 $10,400
GBCI is the premier organization independently recognizing excellence in green business industry performance & practice globally through rating systems such as LEED, WELL, GRESB, SITES, PEER and EDGE.
• Sliding scale fee based on floor area (excluding parking), capped for projects larger than 50,000 m2
• Developers may select and negotiate a competitive audit services price with their own local EDGE Auditor• Discounts available for multiple buildings
The consortium of thinkstep and SGS sets the global benchmark for quality and integrity.
• Flat fee for projects with one typology that includes both audit and certification• Discounts available for hiring an EDGE Expert or portfolio certifications• Pricing includes travel and incidentals
Further resource: EDGE Certify Country Pages