IDB Invest Supports Paladin Realty’s Zero Carbon Affordable Housing Fund, the First of Its Kind in Latin America
IDB Invest will invest up to $10 million in Paladin Realty Latin America VI (Zero Carbon Affordable Housing) Fund LP, the first zero carbon affordable housing fund in the region. IDB Invest’s support consists of a $5 million equity investment, complemented by a $5 million blended finance equity investment with resources mobilized from the Clean Technology Fund (CTF), that will add an extra incentive for the fund manager to achieve increasing levels of sustainability for the portfolio.
The deal aims to increase the availability of capital for the development of sustainable housing, executed by mid-sized developers and targeted to households of Mexico, Colombia, Brazil, and Peru.
The Fund has a target size of $50-$100 million and will invest in the development of affordable housing (first-time homebuyers earning less than each country’s Gross National Income per capita) that complies with the IFC’s Excellence in Design for Greater Efficiencies (EDGE) standards, a green building certification system focused on sustainable development.
Specifically, at least 75% of the Fund’s projects will reach IFC’s highest level of “EDGE Zero Carbon”, meaning that any energy requirements not mitigated through extensive sustainable design features will be offset by the purchase of carbon credits. Paladin was recently named as an EDGE Champion by the IFC for its commitment to sustainable housing, having certified 13 projects and nearly 5,000 units over the past several years.
IDB Invest will provide technical advisory services to support the Fund in the EDGE Zero Carbon certification process. Additionally, these services will include a gender, diversity and inclusion (GDI) advisory to augment Paladin's internal policies for equal opportunity hiring and GDI.
This investment is expected to contribute to seven United Nations Sustainable Development Goals (SDGs): Gender Equality (SDG 5), Clean Water and Sanitation (SDG 6), Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8), Sustainable Cities and Communities (SDG 11), Climate Action (SDG 13) and Partnerships for the Goals (SDG 17).
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $13.1 billion in assets under management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
Paladin Realty Partners, LLC is a real estate private equity investment manager and operator focused on value-added and opportunistic real estate investments in the United States and selected markets throughout Latin America. Paladin has one of the longest track records of any institutional fund manager in Latin America, actively investing in Brazil, Mexico, and the Andean region since 1998, encompassing investments nearly $4 billion in real estate assets, through five pan-regional Latin America funds, two co-investment vehicles and one Brazil-focused vehicle, including more than 37,000 housing units, as well as select commercial, multifamily, student housing, senior housing, and mixed-use properties.
About The Clean Technology Fund
The Clean Technology Fund (CTF), one of two multi-donor trust funds under the Climate Investment Funds (CIF) framework, promotes scaled-up financing for demonstration, deployment and transfer of low-carbon technologies with significant potential for long-term greenhouse gas emissions savings implementation in renewable energy, energy efficiency, and clean transport in emerging market middle-income and developing economies. The CTF is at the forefront of financing promising renewable energy technologies, such as concentrated solar power (CSP). Channeled through the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and World Bank Group, the CTF finances 19 country programs and one regional program with over 90 individual projects.