Every month we introduce you to one of our partners around the world. Ready to learn about all the incredible work happening in the green building space? Let’s dive in!
We sat down with Sirish Chandra Posa, founder and principal consultant at ALF Green Consultants, to learn more about the green building market in India.
The rate at which urbanization has been happening has brought people, planet and profit (3P’s) under a lot of stress. Increased construction activity is shrinking green cover and reducing water bodies, all of which contributes to climate change effects and the environmental challenges we face here in the region.
The good news is that there is a strong business case for the growth of green building market. Emerging evidence indicates that green buildings or buildings that use energy and water more efficiently are a higher-value, lower-risk asset than standard structures.
While building green, savings could be in the range of 0.5 percent to 12 percent with 37 percent decrease in operational costs, achieve higher sale premiums of up to 31 percent with faster sale times and have up to 23 percent higher occupancy rates thereby contributing to higher rental income of up to 8 percent.
Building “green” ensures the efficient use of water resources, energy and locally available materials and which in turn contributes to the reduction in embodied energy, improving human health and environment. Since the idea is all about reuse, reduce and recycle, these buildings will be environmentally friendly and resource efficient.
As of 2017, green building in India was around 5%, which was an indication that there was a scope for huge potential for further growth. With the support from government agencies and increasing awareness on environmental benefits, the Indian green building market is expected to double and may stand at 10 billion square feet by 2022, valued between USD 35–50 Bn, which is an indication that Indian market is growing exponentially.
The growth is primarily being driven by the residential and office sector. The “Housing for All” program, providing affordable housing to lower income groups by 2022, will contribute to the construction of 20 million urban homes and 10 million rural homes. In the office market, India has the third highest green building growth rate in the world.
Contributing to this growth is government’s focus on increased energy efficiency in industry with implementation of Energy Conservation Building Code (ECBC) and Star Rating scheme to set minimum energy standards for new and existing buildings in commercial and residential spaces. An initiative driven by Bureau of Energy Efficiency, Govt. of India
Over the last 15 years, South East Asia has seen a significant increase in adopting sustainable construction practices. Increasing concern about environmental degradation and national energy security have provided countries like Malaysia, Hong Kong, Thailand, Singapore, and Indonesia with enough incentive to establish their own set of sustainability goals.
As the clock is ticking, there is a realization across the global community that green buildings go a long way in negating the effects of climate change. While there is a sense of urgency to “Go Green”, governments worldwide are working on incentives for construction of green buildings in their respective countries, which will propel a double-digit growth on a year-on-year basis.
In terms of numbers, the market for green buildings in India is expected to be USD11Bn and USD 28Bn for commercial and residential respectively by 2025, while in South East Asia the market potential investment opportunity is set to USD16,014Bn for commercial and residential respectively by 2030.
According to IFC’s research, the green buildings sector represents a USD24.7 trillion (USD15.7 trillion in residential and USD 9 trillion in commercial) investment opportunity by 2030 across all emerging market cities with a population of more than half a million people. Most of this investment potential—USD17.8 trillion—lies in East Asia Pacific and South Asia, where more than half of the world’s urban population will live in 2030. The investment opportunity in residential construction, estimated at USD15.7 trillion, represents 60 percent of the market. Moreover, the floor area of the global buildings sector is expected to double by 2060, driven by the growing population and urbanization rates across emerging markets.
The EDGE App, made available by IFC, is one of the key components as it enables consultants / clients to get an overview on the savings both at design and certification stages and saves the additional cost involved in software tools.
Furthermore, IFC has been working with financial institutions (public and private) to provide advice and investment and help launch products such as Green Construction, Green Mortgages, Green Bonds and Home improvement loans. These institutions facilitate the transition to a low carbon economy by investing in Green Building projects, products & technologies and consumer loans. This will enable lenders to reap the benefits of financial products and choose EDGE certification at the same time.
Primarily because of the EDGE App, which is highly effective in helping clients and consultants make choices on the parameters of energy, water and type of materials at design stage. Its interactive features provide a 360-degree view on the utility savings and reduced carbon footprint of the green building against a base case at the design stage, demonstrating the most cost-effective way to lower greenhouse gas emissions. This in turn helps emerging economies save money through the reduction operating cost while achieving increased efficiency. It’s a win-win for everyone.
ALF Green Consultants offers a variety of services to clients, including:
Sintali-SGS provide a unique customer focused collaborative platform which not only addresses the client’s sustainability goals but also helps them to achieve the same.“Sirish Chandra, founder and principal consultant, ALF Green Consultants