Washington, D.C., June 17, 2019—The World Bank Group and Japan Housing Finance (JHF) signed a Memorandum of Understanding (MoU) that aims to foster cooperation on green housing finance in Asian countries.
“With this MoU, we are looking forward to deepening the impact of our global experience and regional cooperation with JHF in developing green housing financial products that can benefit Asian countries in their efforts to address climate change,” said Alfonso García Mora, World Bank Group Global Director, Finance, Competitiveness and Innovation.
“Working together with the World Bank, we are looking forward to sharing our experience and knowledge of green housing finance, and assisting the creation of greener and livable society for everyone,” said Keizo Ohashi, Senior Executive Director and the Member of the Board of Japan Housing Finance.
Under the partnership, the World Bank Group and JHF will focus on financial products in residential energy-efficiency finance, including in such areas as fintech, risk management, policy design, legal and regulatory framework and the overall Green Finance ecosystem.
With housing units among the main contributors to GHG emissions, residential energy efficiency has been recognized as one of the critical areas to support climate change. For many countries across the world, the development of financial ecosystems to support increasing energy efficiency is critical to achieving progress on the climate change front and realizing their commitment to the SDGs.
Particularly so, for Asian countries that are facing severe air pollution due to rapid urbanization and economic growth despite efforts to address climate change. Efforts by many of these Asian governments have resulted in “greening” the housing infrastructure; yet sustainable progress remains challenged by policy design, legal and regulatory frameworks, as well as sustainable market practices.
The joint cooperation between the World Bank Group and JHF -- as a leading global green housing finance practitioner- will build on their global and regional experience in housing and energy efficiency finance, while delivering technical assistance and practical green housing finance solutions to many countries in Asia and beyond. This partnership will also benefit from the Green Residential Housing Finance (GreenHF) Program -- a global initiative by the World Bank Group, in collaboration with the Global Environmental Facility (GEF) to support the design and development of sustainable energy efficiency financial ecosystems.
About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and development expertise for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in pursuing the World Bank Group’s mission to fight poverty and improve living standards for people in the developing world. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org.
JHF is a financial institution fully owned by the Japanese government focusing on purchasing 35-year fixed rate housing loans, so called “Flat 35,” which private financial institutions originate. JHF applies favorable condition to “Flat 35” for building of houses equipped with superior energy-efficiency, superior earthquake-resilient, and other features to contribute to formation of high quality housing stock. JHF issues mortgage-backed securities backed by “Flat 35” and straight bonds to finance the purchasing of “Flat 35.” In January 2019, JHF successfully issued the first Green Bond in Japan purposed for purchasing of “Flat 35” for building of houses equipped with superior energy-efficiency. In March 2019, JHF was awarded the Japan Green Bond Award under the Japan Green Innovation Category from Ministry of the Environment. https://www.jhf.go.jp/english/
About Global Environmental Facility (GEF)
The Global Environment Facility (GEF) was established in 1991 to address global environmental issues while supporting national sustainable development initiatives. The GEF is a mechanism for international cooperation for the purpose of providing new, and additional, grant and concessional funding to meet the agreed incremental costs of measure to achieve agreed global environmental benefits. Since its establishment, the GEF has provided over $18.1 billion in grants and mobilized an additional $94.2 billion in co-financing for more than 4,500 projects in 170 countries. Today, the GEF is an international partnership of 183 countries, international institutions, civil society organizations and the private sector that addresses global environmental issues. https://www.thegef.org