Urban Energy Technical Note 21: Sustainable Building Finance

Finance has been identified among the most important barriers for the adoption of green building designs, and is the topic this guide seeks to address. The regional market presently does not provide adequate financial mechanisms and alternative lending products, i.e. green mortgages or preferential loans for sustainable, green and energy efficient buildings, and asset finance for integrated renewable energy networks. International experience with such products can inform how green property finance can develop in East Africa.

A practical guide to project financing in East Africa is based on the premise that green buildings typically carry higher upfront capital/buyer costs but lower ongoing/operational ones. As such, they offer financial value to lenders, owners, and occupiers; and societal value in reducing resource consumption, and carbon and other forms of pollution. Unlocking this value requires specialist energy efficiency, green building, and localised energy finance.