EDGE DISCOVERY WORKSHOPGreen Buildings for Financial Institutions

www.edgebuildings.com

Conciliation and arbitration of investment disputes.

Guarantees of foreign direct

investment’s non-commercial risks.

Interest-free loans and grants to governments

of poorestcountries.

Loans to middle-income

and credit-worthy, low-income country

governments.

Solutions in private sector development.

IBRD

InternationalBank for

Reconstruction and

Development

IDA

International Development Association

IFC

International Finance

Corporation

MIGA

Multilateral Investment Guarantee

Agency

ICSID

International Centre for

Settlement of Investment

Disputes

IFC IS A MEMBER OF THE WORLD BANK GROUP________

IFC HAS A FOUR-PART STRATEGY TO SUPPORTGREEN BUILDING GROWTH

________

Further Resource: About EDGE

MARKET CREATION

ADVICE

INVESTMENT

IFC’S OFFER FOR FINANCIAL INSTITUTIONS

Long-term loans, warehousing facilities, guarantees and risk-sharing facilities,

structured finance, green bonds

Support in identifying or developing your investment pipeline, market intelligence, training for loan officers and developers,

sustained technical advice

Global and local marketing campaigns, stakeholder education, capacity building,

technical guidance, promotion of incentives

Further Resource: About EDGE

FINANCIAL INSTITUTIONS ARE CREATING INNOVATIVE AND LOW-RISK FINANCIAL PRODUCTS FOR GREEN BUILDINGS

GREEN CONSTRUCTION GREEN MORTGAGES & LEASES CAPITAL MARKETS

CROSS-SELLING OPPORTUNITY

Further Resource: EDGE Banking Pages

FINANCIAL INSTITUTIONS ARE CERTIFYING THEIR OWN OFFICES

MRCBCHINA

BANCOLOMBIACOLOMBIA

PROCREDITBULGARIA

WORLD BANK GROUPGHANA

Further Resource: EDGE Projects

Green Bond Issuance

• $400 million program with $217 in green bonds.

• 1st issuance in Colombia; 2nd bond was 2.8x oversubscribed with 72 domestic investors.

• Use of proceeds for EDGE-certified green construction and green mortgages.

Marketing & Advice

OFFER FOR DEVELOPERS: variable loan for green construction financing from 0.5% up to 2% less than conventional market rates.

OFFER FOR HOMEBUYERS: discounted rate of 65 basis points for the first 7 years of the loan.

Incentives• 17 events with 300 developers,

supported by a major marketing push.

• Dedicated EDGE Expert to guide projects through certification.

• Expansion into neighboring countries.• Most Sustainable Bank in the World Award by Dow Jones Index. • In 2 years, from no certified green homes, to 10,000 certified units.

CASE STUDY: BANCOLOMBIA USED GREEN BONDS FOR GREEN CONSTRUCTION FINANCING AND GREEN MORTGAGES

Results

Further Resource: EDGE Banking Pages

URBANIZATION DEMAND

POLICY RISKSAND BENEFITS

EXISTING KNOW-HOW

DIVERSIFY INVESTMENT

STRATEGY

GREEN BUILDINGS HAVE A TREMENDOUS BUSINESS CASEFOR FINANCIAL INSTITUTIONS

GREEN BUILDINGS HAVE A $16 TRILLION INVESTMENT POTENTIAL THROUGH 2030

Further Resource: Creating Markets for Climate Business Report

$410 billion opportunity in new buildings, more in retrofits

Eastern Europe

$900 billion opportunity

Latin America

$150 billion opportunity in just a few countries analyzed

Sub-Saharan Africa

$100 billion opportunity in 3 countries analyzed

Middle East

$1.5 trillion opportunity in fast-growing nations

South Asia

$13 trillion opportunity driven by the Chinese market

East Asia

CASE STUDY: INTERNATIONAL HOUSING SOLUTIONS, A PRIVATE EQUITY FUND IN SOUTH AFRICA IS WORKING WITH DEVELOPERS TO GREEN ENTIRE PORTFOLIO

• 1st in Africa to adopt EDGE –winner of international awards.

• Over 7,000 units across 20 projects certifying with EDGE.

• Simple technical features, including passive design.

• Education across the value chain, learning on pilot projects, data collection.

• Incremental costs minimized.

• Sales proposition: save 1 month of rent free.

Further Resource: Green Homes for All

HOW DO DEVELOPERS CHOOSE THE MOST COST-EFFECTIVE OPTIONS TO DESIGN GREEN? AND HOW DO END CUSTOMERS RECOGNIZE THE VALUE?

THE SOLUTION IS EDGE________

20%

① FREE SOFTWARE ② ACHIEVABLE STANDARD ③ VERIFIED GREEN LABEL

Further Resource: EDGE Software Demo

DEFINITION OF A GREEN BUILDING________

20%20%20%20%

CERTIFIABLY GREENAS VERIFIED BY

AN INDEPENDENTTHIRD PARTY

BETTERPERFORMANCE

THAN THELOCAL BASELINE

& 20%

QUANTIFIED IMPACT REPORTING

&

EDGE IS ALIGNED WITH INTERNATIONAL GREEN FINANCE STANDARDSFOR GREEN BUILDINGS

________

• Used by property developers and investors to obtain data on the performance of their investments.

• EDGE can be used completing the Real Estate Assessment or the Developer Assessment.

• ICMA releases the Green Bond Principles as well as guidelines for green buildings.

• EDGE is listed as an accepted certification standard. (See Section E: Certification Standards).

• CBI releases standards for green bonds funding residential or commercial buildings.

• EDGE is included as a qualifying certification system.

THE FREE SOFTWARE SHOWS RETURN ON INVESTMENT FOR RESOURCE EFFICIENCY MEASURES, TAILORED TO LOCAL CLIMATE

________

EDGE IS AVAILABLE ACROSS ALL SECTORS, FOR BUILDINGS OF ALL VINTAGES________

NEW BUILDINGS

HOMES HOSPITALITY•Hotel•Serviced Apt•Resort

RETAIL•Department store•Shopping mall•Supermarket•Big box store•Food store•Airport

OFFICES HOSPITALS•Hospital•Clinic•Nursing home

EDUCATION•Pre-school•School•University•Sports facility•Religious facility

INDUSTRIAL•Warehouse•Light industrial

PORTFOLIO CERTIFICATIONS

EXISTING BUILDINGS &

REFURBISHMENTS

EDGE WEBSITE HAS A LIBRARY OF CASE STUDIES,WHICH CAN BE USED FOR PROMOTION OR PROOF-OF-CONCEPT

CLICK ON LINKS FOR IN-DEPTH PROJECT STUDIES

Ecohome 3 (VNM)Homes by Capital House

Villa del Rio (COL)Retail by ASHMOREAvenida

Hilton Cucuta (COL)Hotel by Hilton

Johnson Controls HQ Asia (CHN)Offices by Johnson Controls

Sakura Montessori School (VNM)School by EMC Education

Komfo Anokye Hospital (GHA)Hospital by ABP

Antananarivo Airport (MDG)Airport by Bouygues and Colas

Esteban Echeverria (ARG)Warehouse by Plaza Logistica

King Hussein Business Park (JOR)Offices by the Business Park

Revolucion 757 (MEX)Homes by FICADE

THE EDGE STANDARD FOCUSES ON THREE CATEGORIES OF RESOURCE EFFICIENCY

________

20%20%20%

20%

Further Resource: EDGE Methodology

THERE ARE THREE WAYS TO CERTIFY. REACH AT LEAST 20% SAVINGS IN WATER AND MATERIALS, THEN CHOOSE YOUR ENERGY SAVINGS.

________

Further Resource: EDGE Certification

CASE STUDY: ARTHALAND CENTURY PACIFIC TOWER IN THE PHILIPPINES IS THE FIRST ZERO CARBON BUILDING CERTIFIED WITH EDGE

• First in the world to achieve EDGE Zero Carbon certification

• Located in Metro Manila, Philippines

• Project has energy savings of 45% with 100% offsite renewable energy

• ArthaLand is a pioneer in development of sustainable projects that couple innovative design with high quality construction

Further resource: EDGE Case study

AN EDGE CERTIFICATE REDUCES REPUTATIONAL RISK AND CAN BE USED AS A VERIFICATION INSTRUMENT TO SIMPLIFY COMPLIANCE

________

EDGE IS AVAILABLE IN MORE THAN 150 COUNTRIES________

EDGE is focused on emerging markets because of the World Bank Group’s mission.

FINANCIAL INSTITUTIONS ARE CREATING INNOVATIVE AND LOW-RISK FINANCIAL PRODUCTS FOR GREEN BUILDINGS

GREEN CONSTRUCTION GREEN MORTGAGES CAPITAL MARKETS

• Create awareness of affordability• Build technical capacity for

developers• Recognize lower risk rating•Offer discounted financing rate

• Increase allowable loan ratio• Include utility savings in

homebuyers’ income• Attract more responsible

homebuyers with less risk of late payments and loan defaults

• Issue green bonds for new portfolio• Securitize portfolio as collateral• Attract new investors• Expand into new markets

Develop new products: Leasing, REITs

CROSS-SELLING OPPORTUNITY

INVESTMENT CRITERIA AND COMPLIANCE PROCESS________

3-6 MONTHS FOR DESIGN CERTIFICATION

GREEN CONSTRUCTION FINANCE

GREEN MORTGAGE

EMBEDDED INTO LOAN AGREEMENT

CERTIFICATE PROVES COMPLIANCE

IMPACTREPORTING

FOR FINANCIAL INSTITUTIONS ROLLING OUT A GREEN BUILDING PROGRAM, HIRING EDGE EXPERTS IS BEST PRACTICE

① Embedded within the certification process

② Provide design advice to developers andfulfill compliance requirements

③ Ensure certification awarding within the requisite time frame

① Basic or advanced services for developers

② Training for investment officers

③ Comprehensive advisory services agreement with IFC

LEVELS OF TECHNICAL ADVICE POSSIBLE: ROLE OF EDGE EXPERTS:

CASE STUDY: BANCO PICHINCHA IN ECUADOR OFFERS FREE EDGE CERTIFICATION, EDGE TRAINING, AND TECHNICAL ADVISORY SERVICES

CERTIFICATION WORKFLOW FOR DEVELOPERS________

OPERATIONCONSTRUCTIONDESIGN

Submit design documents into the EDGE App

PRELIMINARY EDGE CERTIFICATE OR EDGE

ADVANCED CERTIFICATE

Site visit & as-built documents submitted

in EDGE App

REGISTER

Use the EDGE App for self-assessment &

project registration

• EDGE co-marketing and project study for sales promotion• EDGE Advanced certificate

automatically granted to projects with 40% energy savings

FINAL EDGE CERTIFICATE OR EDGE ADVANCED

CERTIFICATE

•Asset certification does not need to be renewed

Operational data submitted in EDGE

App carbon calculator

ZERO CARBON CERTIFICATE

• Project must have one year of operation & 75% occupancy•Must renew operational

certificate every 2-4 years

CASE STUDY: ROMANIA GREEN BUILDING COUNCIL (ROGBC)’SGREEN MORTGAGE MODEL WITH RAFFEISEN BANK

GREEN MORTGAGE EXAMPLE

•Additional cost of efficiency measures•Costs can be lowered if EDGE

is utilized early in the process

WIN-WIN

TERMS CAN VARY

HIGHER LOAN AMOUNT

•Benefits accrue even on commercial terms, but bank can incentivize adoption

•Lower bills for the borrower•Higher income for the bank

STANDARD BUILDING:STANDARD MORTGAGE

GREEN BUILDING: GREEN MORTGAGE

BASE PURCHASE COST 50,000 50,000

GREEN MEASURES 1,500

20% DOWN PAYMENT (10,000) (10,300)

LOAN AMOUNT 40,000 41,200 3%

RATE 11% 11%

TERM 20 yrs 20 yrs

MONTHLY PAYMENT $413 $425

ENERGY SAVINGS (20)

NET MTHLY PAYMENT $413 $405 -2%

BANK INCOME (YR 1) 4,371 4,502 3%

CASE STUDY: DAVIVIENDA OFFERS A GREEN CONSTRUCTION FINANCING RATE AND A PROMOTIONAL OFFER OF FREE EDGE CERTIFICATION

127 LIVING• Reduction of max 100 basis

points for residential and mixed-use buildings.

• 50% of the cost of EDGE certification.

Further resource: EDGE Banking Pages

CASE STUDY: BANCO PROMERICA IN COSTA RICA OFFERS LOWER INTEREST RATE, LONGER TENOR AND GRACE PERIOD

127 LIVING• Rate: 8.75% green construction

financing rate compared to a normal rate of 9.25%.

• Four years compared to a normal term of three years.

• 24 months compared to a normal grace period of 18 months.

Further resource: EDGE Banking Pages

GOVERNMENT INCENTIVES FOR GREEN BUILDINGS

Further Resource: EDGE Government Pages

Peru: Height Bonus Incentive

Colombia: Exclusion of VAT Brazil: Discounted

Property Tax

Argentina: Exclusion of VATGhana: Lower

Permit Fees India: Extra Floor Area Ratio

Bangladesh: Discounted Rate

CASE STUDY: PROCREDIT IS CERTIFYING A PORTFOLIO OF ITS OFFICES AND PROMOTING GREEN BUILDING FINANCE

• Two Head offices certified: Sofia, Bulgaria and Skopje, Macedonia through a Portfolio certification program.

• Technical measures: efficient building envelope, LED lighting and sensors, renewable electricity.

• Efforts toward Zero Carbon certification and expanding EDGE reach to other country offices.

Further resource: EDGE Projects

IFC WILL EXTEND MARKETING SUPPORT TO YOU AND YOUR CLIENTS

Further resource: EDGE Marketing Toolkit

EDUCATION AND BUY-IN

CERTIFY OWN OFFICES

LAUNCH INVESTMENT

PROGRAM

WORK WITH EDGE EXPERTS

NEXT STEPS AND CALL TO ACTION

Further Resource: EDGE Events Calendar

EDGE ACKNOWLEDGMENTS________

The following major donors have demonstrated their generous support of the EDGE program:

IFC also wishes to express its appreciation to the following donors:

The European Union; the Ministry of Finance of Japan; the Hungarian Export Import Bank; the Canada Climate Change

Program and the Department of Foreign Affairs, Trade and Development Canada; the Royal Ministry of Foreign Affairs of

Denmark and the Danish Green Growth Fund; the Federal Ministry of Finance of Austria; and the Ministry of Foreign Affairs

of Finland. In addition, the support of the GEF-IFC Earth Fund Platform and the Energy Sector Management Assistance

Program (ESMAP) of the World Bank helped seed EDGE.

www.edgebuildings.com

To help banks launch a green buildings investment program for green construction finance, green mortgages, and/or green bonds, enabling greater market share and recognition as a “green bank” while reducing risk.

Objective

ADVANTAGES FOR BANKS

WHY EDGE: SUMMARIZING THE INVESTMENT CASE FOR BANKS

Lower investment risk with both developers and homebuyers

Reduce reputational and policy risk

Capture greater market share

Diversify investor base

Achieve recognition

To provide property developers with a competitive advantage through product differentiation, capturing all of the benefits of certification affordability, a streamlined certification process, and association with the World Bank Group brand.

Objective

WHY EDGE: DIFFERENTIATING PROPERTIES THROUGH EDGE CERTIFICATION________

ADVANTAGES FOR DEVELOPERS

Positioning as a first mover in the market with a major marketing and communications push backed by the World Bank Group brand

Potentially higher prices or quicker sales through differentiation

Lowered costs by incorporating EDGE early into the design process

Online certification process from A to Z with the most affordable certification fees and free use of the design software.

Certification reduces reputational risk, satisfies compliance criteria, and communicates value to buyers

To empower homebuyers to benefit from utility savings that can be repurposed and provide financial protection while offering a more comfortable lifestyle and inspiring a sense of doing “the right thing” for the planet.

Utility bill savings that can be repurposed for better quality of lifeObjective

ADVANTAGES FOR HOMEBUYERS

Potential better resale value

Better thermal comfort

Pride in green achievement

WHY EDGE: SUPPORTING A BETTER QUALITY OF LIFE FOR CUSTOMERS________

Less chance of late payments or loan default

EDGE DELIVERS VALUE________

FINANCIAL CALCULATOR

SIMPLIFIED COMPLIANCE

REDUCED PROCESSING

EASY IMPACT REPORTING

WORLD BANK GROUP BRAND

COST EFFECTIVE

GLOBAL CERTIFIERS OFFER TWO DIFFERENT MODELS TO BEST MEET YOUR NEEDS

CERTIFICATION PRICE PER M2 MINIMUM

0-25,000 FLOOR AREA (SQM) $0.27 $2,250

25,000-50,000 FLOOR AREA (SQM) $0.22 $6,750

> 50,000 FLOOR AREA (SQM) — $11,000 Flat Fee

PROJECT TYPE CERTIFICATION DESIGN AUDIT FINAL AUDIT TOTAL

Residential (up to 100 units| 3 unit types) $2,400 $4,000 $4,000 $10,400

Commercial (single end use) $2,400 $4,000 4,000 $10,400

GBCI is the premier organization independently recognizing excellence in green business industry performance & practice globally through rating systems such as LEED, WELL, GRESB, SITES, PEER and EDGE.

• Sliding scale fee based on floor area (excluding parking), capped for projects larger than 50,000 m2

• Developers may select and negotiate a competitive audit services price with their own local EDGE Auditor• Discounts available for multiple buildings

The consortium of thinkstep and SGS sets the global benchmark for quality and integrity.

• Flat fee for projects with one typology that includes both audit and certification• Discounts available for hiring an EDGE Expert or portfolio certifications• Pricing includes travel and incidentals

Further resource: EDGE Certify Country Pages