NEW DELHI: The International Finance Corporation (IFC) has pledged up to $150 million as a leading equity investor in the H-DREAM Fund, a private credit initiative worth $1 billion aimed at advancing the development of sustainable, affordable, and mid-income housing in urban India. The H-DREAM Fund is managed by HDFC Capital Advisors, the private equity division of HDFC Group and a subsidiary of HDFC Bank.
With an initial capital of $500 million and an additional $500 million green shoe option, H-DREAM’s goal is to attract long-term investments from both global and domestic institutional investors.
The fund will finance projects that adhere to the Excellence in Design for Greater Efficiencies (EDGE) green building framework, aligning with international sustainability standards. This initiative aims to facilitate the construction of at least 25,000 green-certified housing units targeting affordable and mid-income families in urban centers across India.
“By enabling developers to issue green finance instruments and scale sustainable projects, our collaboration with HDFC Capital is designed to create jobs, enhance urban resilience, and establish a benchmark for urban transformation,” remarked Imad N Fakhoury, regional director for South Asia at IFC.
India is currently experiencing an urban housing deficit estimated at 18 million units in tier-I and tier-II cities, with approximately 275 million individuals lacking adequate and affordable housing.
The IFC expects its investment to mobilize up to $850 million from institutional investors and other sponsors. HDFC Capital has indicated that it has already secured in-principle commitments of around $350 million from various global and domestic institutions and family offices.
“This platform will channel both global and domestic capital to meet one of India’s most fundamental social needs—housing. We are witnessing a keen interest from global institutions and Indian family offices, with ~$350 million in commitments already secured,” stated Vipul Roongta, MD & CEO of HDFC Capital.
A recent IFC report highlights a $1.4 trillion investment opportunity in India’s green building market by 2030, with nearly $1.25 trillion anticipated from the residential sector.
The investment strategy for the H-DREAM Fund includes early-stage financing to address supply-side challenges in developing quality affordable and mid-income housing. The fund will adhere to IFC’s Environmental & Social Performance Standards and the EDGE Green Building Framework.
