IFC and Cagamas to Drive Green Building Finance and Sustainability in Malaysia

• Agreement to promote green building finance in Malaysia, aiming to support the country’s climate goals and sustainable development.
• Will focus on increasing financial institutions’ capacity to offer green mortgages and sustainable financing solutions, particularly benefiting lower-income groups and women.

The International Finance Corporation (IFC), part of the World Bank Group, has entered into a memorandum of understanding with Malaysia’s national mortgage corporation, Cagamas Berhad, to advance green building finance in the country.

Under this collaboration, IFC and Cagamas aim to encourage climate-smart investments within Malaysia’s housing and building sectors. The initiative will support financial institutions in developing green finance products such as green bonds, credit lines, and sustainable cooling technology financing. Additionally, the partnership seeks to enhance banks’ capabilities in managing environmental, social, and climate-related risks associated with building projects.

Judith Green, Country Manager for the World Bank Group in Malaysia, stated: “We are delighted to collaborate with Cagamas on this engagement, which will play a critical role in supporting not only the increasing need for green housing in Malaysia, but also the country’s inclusivity agenda. Together, we aim to improve access to housing and reduce emissions, encouraging climate-smart investment in the building sector, and strengthen the financial sector’s capacity to support Malaysia in achieving its climate commitments under the Paris Agreement.”

The partnership also intends to address affordability and accessibility of green housing for lower-income groups and women by expanding the market for green mortgage products

Kameel Abdul Halim, President and Chief Executive Officer of Cagamas Berhad, commented: “This collaboration marks another milestone in Cagamas’ commitment to driving sustainable development to promote green and affordable housing for all Malaysians, and we are excited to partner with IFC towards making this a reality. At Cagamas, we understand that the transition to green practices across sectors requires significant financial resources and innovative approaches. Through this partnership, we aim to expand access to green mortgage options and collaborate with financial institutions to create a more inclusive and sustainable housing market that contributes to a greener Malaysia.”

This marks IFC’s first engagement specifically within Malaysia’s green building sector since establishing its presence in the country in 2023.

Photo by Scott Blake on Unsplash