sintali-web-logo-black-1sintali-web-logo-black-1sintali-web-logo-black-1sintali-web-logo-black-1
  • About Sintali
    • About Us
    • Careers
    • Our Services
    • Our Partners
    • Sustainability
  • EDGE Certification
      • EDGE
      • About EDGE
      • Our Approach
      • Zero Carbon Portfolio
      • Pricing
      • Technical Queries
      • Expedited Reviews
      • Get a Quote
      • EDGE Training
      • EDGE Experts Training
      • Book Training
      • Request Training
      • Resources
      • Case Studies
      • FAQs
      • List of Banks
  • Green Finance
  • Training program
    • EDGE Experts Training
    • Book Training
    • Request Training
  • Resources
    • Blog
    • News
    • Webinars
CONTACT US

The Barriers to Financing Green Buildings

Published by Eleni Polychroniadou on October 25, 2021
Categories
  • Blog
Tags

We are finally seeing the world come to terms with the climate crisis, and the idea that to protect life on this planet we must meet net zero emissions by 2050. With COP26 now around the corner, leaders from the business and government world are very focused on setting ambitious climate commitments and targets to help make this happen, as well as bringing in financial institutions to discuss how we actually finance these projects.

From the developer and project owner side, there is clearly appetite for building green, but there continues to be a concern in the market of how to implement it, and more important, how to finance these improvements and developments.

The good news? Investors are interested in financing green buildings. It is a compelling asset class and a growing investment opportunity across the globe. 

Today’s buildings generate 28 percent of energy-related greenhouse gas emissions and consume 40 percent of electricity globally, contributing significantly to the climate challenge ahead of us. This creates a significant opportunity for green investments. IFC has calculated that there is a $24.7 trillion investment opportunity in emerging markets alone by 2030 in green buildings.

Over the next few weeks, we will be sharing insights directly from different financial institutions on the challenges with sustainable construction and the opportunities for projects to get financed.

Before understanding what criteria projects need to meet to get financed, we first need to understand why things have been difficult to date. One of the biggest barriers in financing green real estate isn’t the actual financing, but the lack of education around green buildings across the value chain.

Developers, investors, tenants, and the broader public, still do not understand green buildings and how to make them happen. This presents a unique challenge as it creates uncertainty across all parties on what qualifies as green and how to implement it, particularly at scale.

It starts with the developers and owners of buildings. There is still confusion and lack of clarity on the business case for building green. Many around the world still think there is a very high incremental cost and are unclear on the tangible business benefits. There is also a lack of capacity in implementing green building technology. Many developers do not have the experience or access to the skills required to build or retrofit green buildings. For those that do, they often don’t have the knowledge or understanding of the green finance market, and don’t know what financial options are available and how to access better financial terms with green buildings.  

Many of these challenges are reflected in the investor community too. Many investors are lacking the information and knowledge that green building investments lead to lower default rates and don’t fully understand the business case for green building portfolios themselves. For those that do, there is another challenge in how to identify what classifies a green building and match potential projects to the financial terms and requirements as defined by the financial institution.

Even from the side of the end user, whether that is the tenant or the general public, awareness of the benefits of green buildings remains very low. When the end user isn’t aware of green buildings. Green buildings bring utility savings, making a very compelling case for the end user, but if users don’t know this, they can’t demand it from their landlords. And when there is low demand, there is lower incentive for developers and owners to invest in this area.  

All of these factors create a vicious circle, as shown in the infographic below.

Infographic showing the how the lack of awareness on green buildings affects the viability of implementing green buildings.

So how do we solve these challenges? Stay tuned for our series on finance for green buildings to find out!

Can’t wait? You can watch our latest webinar with Lloyds Bank, Standard Chartered Bank and the International Finance Corporation to hear what solutions are available directly from financial institutions.

Share
1
Eleni Polychroniadou
Eleni Polychroniadou
Eleni Polychroniadou is the Commercial Director and a Co-Founder at Sintali. In her role, Eleni leads the commercial division of the organisation and drives business development activities to help the EDGE market grow internationally.

Related posts

January 31, 2023

Green Building: A portfolio approach


Read more
December 15, 2022

Sintali brings you a Year in Review


Read more
November 4, 2022

How to make infrastructure projects bankable in Africa


Read more


Recent News

  • Green Building: A portfolio approach
  • Sintali Co-Founder named one of 2023’s most inspiring female entrepreneurs
  • Sintali brings you a Year in Review
  • Sintali partners with consulting company Zero Energy Building to accelerate the uptake of EDGE in Greece
  • Case Study: Aga Khan Academy, Bangladesh

Blog Archive

  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • July 2020

Categories

  • Blog
  • Events
  • Knowledge Hub
  • News
  • Uncategorized
CONTACT US

Sintali Limited
Cardinal Point Park Road
Rickmansworth, Hertfordshire
WD3 1RE, United Kingdom

Tel: +44 (0)204 522 8601

sales@sintali.com
STAY CONNECTED

Follow us on social media and get updates in real time


JOIN THE COMMUNITY

Stay up to date with the latest from Sintali

© 2022 Sintali Limited
Website design by Create + Deploy
  • Home
  • Privacy Policy
  • Cookie Policy
  • Terms and Conditions
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Cookie settingsACCEPT ALL
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.

CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-advertisement1 yearThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.

Functional

Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.

Performance

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

Analytics

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.

CookieDurationDescription
_ga2 yearsThis cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors.
_gid1 dayThis cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form.

Advertisement

Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.

Others

Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.

CookieDurationDescription
_gat_gtag_UA_176578450_11 minuteNo description
asp_transient_idsessionNo description

SAVE & ACCEPT
Powered by CookieYes Logo