44139 - HDFC II

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Summary of Investment Information

Project Number

44139

Company Name

HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED

Date SPI Disclosed

Jul 1, 2021

Country

India

Region

South Asia

Projected Board Date

Jun 30, 2021

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

May 5, 2024

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Jun 21, 2021
Signed : Jun 30, 2021
Invested : Jul 20, 2021

Sector

Primary Mortgage Institutions

Project Description

The proposed investment comprises a senior debt investment of up to US$250 million in HDFC Limited (HDFC or the Company). The loan proceeds will be used to provide retail buyers financing for affordable housing with a mutually agreed portion of IFC funding to be earmarked for green affordable housing.

Associated Advisory Engagement

IFC will share global best practices in affordable and green building financing by conducting workshops/case study walk throughs from other countries and support HDFC’s capacity building exercises for the Company to successfully identify and expand into this affordable green housing segment. Specifically, IFC will advise the Company on many aspects of the affordable green housing segment including its potential and impact, the certifications and potential pipeline of projects, as the Company continues to build a commercially viable green affordable housing asset class.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	250.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Housing Finance

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The Project is in line with the Government of India's "Housing for All by 2022" initiative. The most significant, expected project-level outcome is increased access to financing for affordable housing for lower and middle-income segments. The Project will also support HDFC in gradually growing its nascent green housing portfolio. Beyond the Project, IFC anticipates that the investment, together with other IFC's efforts in the segment, will help promote greater competitiveness in affordable housing financing via demonstration and replication channels.

IFC's additionality is both financial and non-financial. Financial additionality is via (i) the provision of longer tenor financing in which will help HDFC better manage its asset-liability mismatches. Non-financial additionality is in the form of knowledge and capacity building to develop HDFC's (green and affordable housing loans) sourcing capabilities and pipeline development activities.

E&S Category Rationale / Risks and Mitigation

IFC's loan will be utilized only for retail (individual buyers) affordable home loans portfolio. The proceeds will not be used to support any coal-related activities, any builder finance or financing acquisition of land or higher risk business activities that may include significant Occupational Health and Safety risks or impacts on the environment, community health and safety, biodiversity, cultural heritage, involuntary resettlement or risk of adverse impacts on Indigenous Peoples. Hence, the proposed project presents no adverse environmental or social risks or impacts and the project is categorized as FI-3 in accordance with IFC's Environmental and Social Sustainability Policy. The company's HR policies and practices are in line with IFC Performance Standard-2 requirements.

Given the E&S risk nature of this project, development of a robust ESMS was not needed.

Contacts

For Inquiries About the Project, Contact

HDFC Limited
Ms. Jigna Negandhi
Manager
022-66316566
jignan@hdfc.com
HDFC Limited, HDFC House, 165-166, Backbay Reclamation, H.T. Parekh Marg, Churchgate, Mumbai - 400 021
https://www.hdfc.com/

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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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