World Bank Group member The International Finance Corporation (IFC) has committed up to $150 million as an anchor equity investor in a new $1-billion fund launched by HDFC Capital Advisors to finance green, affordable, and mid-income housing across urban India.
The fund, named H-DREAM (HDFC Capital Development of Real Estate Affordable and Mid-Income), will be managed by HDFC Capital, the real estate private equity arm of HDFC Bank. With a base corpus of $500 million and a green shoe option of an additional $500 million, H-DREAM is one of the first private credit funds globally to focus on sustainable housing in this segment, the firm said.
The fund is expected to help mobilise up to $850 million from other institutional investors, including sponsor commitments. H-DREAM aims to finance the development of at least 25,000 green, affordable and mid-income homes.
“For India, housing remains a social imperative and has strong multiplier effects on the economy,” said Deepak Parekh, Non-Executive Chairman of HDFC Capital.
India faces a housing shortfall of approximately 18 million units in urban Tier 1 and Tier 2 cities, affecting about 275 million people.
“Green affordable housing delivers a dual impact: it meets the urgent need for inclusive housing while advancing sustainability in urban development,” said Imad N Fakhoury, Regional Director for South Asia at IFC.
“By empowering developers to issue green finance instruments and scale sustainable projects, our partnership with HDFC Capital aims to create jobs, build resilience, improve livability in cities, and set a benchmark for the future of urban transformation.”
According to IFC estimates, India’s green building market represents a $1.4 trillion investment opportunity by 2030, with the residential sector accounting for nearly 90% of that.
Vipul Roongta, MD & CEO of HDFC Capital, said the platform had already received in-principle commitments worth about $350 million from global and domestic institutions and Indian family offices. “This platform will channelize global and domestic capital to address the most basic social need of housing in India.”
