Autif Sayyed Green Building Specialist- IFC World Bank Group

Nhan Nguyen Vietnam Green Building Project Lead- IFC World Bank Group

Green Buildings Opening a Short-lived Window of Opportunity

50% of the buildings standing in 2050

have not been built yet

Green Buildings Opening a Short-lived Window of Opportunity

Incorporating efficiencies in new design is up

to 10x cheaper than retrofitting later

Once built, their inefficiencies will be

locked for next 30-50 years

Green Buildings Opening a Short-lived Window of Opportunity

• Why are Green Buildings needed?

• What is stopping us from building green buildings?

• How can we overcome these hurdles? Examples?

• Green Building Opportunities in Cambodia

Why Green Buildings? Impact of Resource Efficiency in Buildings

Economic

Users save money on operations

Healthier buildings lead to better

worker performance and

attendance

Government can avoid cost of

building additional energy/ water

infrastructure

Environmental

Reduced need for energy from

dirty sources

Reduced need for potable water

Reduced air and water pollution

Better indoor environment

CO2 emission reductions by 2030

Source: 4th Assessment Report of IPCC

Building sector offers largest low-cost potential for CO2 emission reductions globally by 2030

Hurdles to Green Buildings Why are so few being built?

“It’s not required”

Lack of Regulations

“It’s costly”

Perception of cost

“Who pays for it?”

Financing of green

“Where’s the demand?”

Lack of awareness

“It’s difficult”

Perception of complexity

“I want recognition”

Validated certification

Hurdles to Green Buildings Why are so few being built?

“It’s not required”

Lack of Regulations

“Who pays for it?”

Financing of green IFC’s 3-pronged approach

“I want recognition”

Validated certification

Mandatory Codes

Investment products

EDGE Voluntary

Certification

Hurdles to Green Buildings Why are so few being built?

“It’s costly”

Perception of cost

“Where’s the demand?”

Lack of awareness

“It’s difficult”

Perception of complexity

Cost Analysis of relevant code requirements for low payback

Free EDGE software to guide cost decisions

Capacity building of

govt.

Awareness raising

among all

Simplified certification

process

Incentives/ penalties

etc.

Mandatory Regulations Solutions to Green Building Hurdles

Mandatory Requirements that are:

• Simple

• Low Cost and payback

• Impactful

Capacity Development Solutions to Green Building Hurdles

User Guides

Training IT platform- Checklists

Capacity Development Solutions to Green Building Hurdles

Building up the Business Case

Academic Association

Partnerships with Architects, engineers, developers associations on increasing the

acceptance of GB

Industry association

Pilot Projects

Media Campaign

Voluntary Certification Solutions to Green Building Hurdles

www.edgebuildings.com

EDGE standard focused on top priorities

20% energy

reduction

20% water

reduction

20% embodied

energy reduction

Voluntary Certification Solutions to Green Building Hurdles

www.edgebuildings.com

Current ratings systems

focused on top-tier

clients have provided

leadership

Emerging markets needs

a simple, quick, and

affordable rating system

for market transformation

– making it accessible to

a majority of the building

industry

Informal building sector

Voluntary Certification Solutions to Green Building Hurdles

0.00%

Voluntary Certification Solutions to Green Building Hurdles

4 EASY STEPS TO PRELIMINARY CERTIFICATION

Nam Long, E-Homes 5, Vietnam

ENER

GY

20%

WA

TER

22%

MA

TERIA

LS

27%

Apartments feature high-performance glazing and energy-efficient lighting and controls, thermal insulation and dual-flush water closets, autoclaved aerated concrete blocks for internal and external walls.

Additional cost: 1.2% over total investment

FPT Danang Building, Vietnam

This EDGE-certified complex features solar PVs, sensible heat recovery from exhaust air, and higher thermal performance glass to save energy, while a cooling system with a dry cooling tower avoids water usage.

ENER

GY

21%

WA

TER

32%

MA

T

20%

City Express Hotel, Mê-xi-cô

The project untilises low-e glass and shading devices to reduce solar radiation. Moreover, uPVC window frame and concrete blocks that have lower embodied energy were chosen as substitutes.

ENER

GY

51%

WA

TER

32%

MA

TERIA

LS

44%

Additional cost $56,209 – payback period 0.6 years

Keserwa Medical Center, Lebanon

The project saves energy by using efficient cooling system together with a waste heat recovery system. The building also uses green materials such as light concrete blocks and gypsum broad for walls.

ENER

GY

21%

WA

TER

25%

MA

TERIA

LS

26%

Additional cost $94,803 – payback period 1,21 years

Citra Mall, Indonesia

The project saves energy by investing in efficient lighting system. On the other hand, water efficient taps, toilets, urinals, showers, and an automatic control system helps the building reduce its water consumption.

ENER

GY

20%

WA

TER

65%

MA

TERIA

LS

22%

Additional cost: $0

Voluntary Certification Solutions to Green Building Hurdles

Financial Investment Solutions to Green Building Hurdles

IFC’s Direct Investments with developers

$350M per year & growing

Conditional on meeting minimum standards &

efficiencies

Investments through local banks

Green Mortgages

Green Construction Loans

Financial Investment Solutions to Green Building Hurdles

Financial Investment Solutions to Green Building Hurdles

ODEA Bank IFC debt: $67m Concessional debt: $15m

Value and Budget Housing IFC equity: $11m

Housing Finance Bank Kenya IFC debt: $16m Concessional debt: $4m

IHS IFC equity: $25m Concessional equity: $10m

City Express IFC equity: $20m

Deals without concessional finance. Deals with concessional finance.

Concessional finance is not always essential but in the form of debt (with longer tenor, lower interest, or subordination), guarantee or patient equity, it can provide first movers with the commercial incentive to innovate in the face of higher perceived costs or risks.

Financial Investment Solutions to Green Building Hurdles

Vietnam Energy Efficiency Code Example

Development of Building Energy Efficiency Code (BEEC)

User Guides

Awareness raising

Demonstration Projects

Support 3 provinces

o Introduction of BEEC to all stakeholders

o Training/coaching

o Pilot evaluation

Training BEEC compliance evaluators

Vietnam Energy Efficiency Code Example

DA NANG QUANG NINH HCMC

Trained more than 1000 officials & building practitioners in three regions

Vietnam Energy Efficiency Code Example

29

Website introduction of QCVN 09:2013/BXD

FPT Office in Da Nang

La Thanh Hotel in Ha Noi

Ehome in Ho Chi Minh city

Completed Energy Efficiency design for three demonstration buildings and Appraisal in compliance with

the code.

Vietnam Energy Efficiency Code Example

30

Financial Investment Examples

IFC has provided loans and Partial credit guarantees for Ciputra Residence

Citra Towers Citra Plaza Apartment Citra Lake Suites

Financial Investment Examples

$75 million non-convertible debenture for investment in green home construction

PUNJAB NATIONAL BANK HFL, INDIA

EDGE benefits to the bank: • Brand enhancement pre-IPO • Access to new clients • Increased green deal flow with opportunity to cross sell EDGE construction finance

to EDGE mortgage finance What IFC provided: • helped the bank assess market potential • helped the bank pitch to existing clients about going green • introduced the bank to new clients, often the best, forward-thinking developers • provided training to bank staff on green asset management:

• criteria for use of proceeds; funds management; reporting.

Cambodia Current Growth Patterns

GDP growth of 7.3 in 2015 and forecast 7.5 in 2016

Building Stock by Building Type, Cambodia: 2014-2024

Building Type Units 2014 2015 2016

CAGR

(2014-2024)

Office (m2) 2,793,744 2,849,274 2,905,642 1.9%

Retail (m2) 1,727,318 1,766,943 1,807,570 2.3%

Education (m2) 1,416,506 1,463,362 1,516,526 3.7%

Healthcare (m2) 417,563 428,281 439,346 2.7%

Hotels & Restaurants (m2) 992,107 1,021,272 1,054,509 3.3%

Institutional/Assembly (m2) 695,882 748,300 802,155 6.4%

Warehouse (m2) 85,281 84,654 83,536 -2.4%

Commercial (m2) 8,170,026 8,403,408 8,650,408 2.9%

Single-Family Detached (m2) 2,105,442 2,141,744 2,178,123 1.5%

Multi-Unit Residential (m2) 38,591,630 39,613,568 40,778,182 2.9%

Residential (m2) 40,697,072 41,755,312 42,956,305 2.8%

Total (m2) 48,867,098 50,158,720 51,606,713 2.8%

Source: Navigant Research

Cambodia Current Growth Patterns

“Phnom Penh is experiencing a significant

increase in supply, … Overall supply in Phnom

Penh is due to increase by 533.75% by the end of

2018.”

Rose by 22.4% in 2015 (total of 440 units) with forecasted increase to 21,414 units in 2018.

Phnom Penh Condominium Supply by Grade

Cambodia Current Growth Patterns

35

Cambodia office stock will see an increase of 64 per cent by 2018, with 60 per cent of the incoming supply classified as Grade A and 40 per cent classified as Grade B.

Current Cambodia per capita retail space of 0.0087 sqm points to an undersupply, especially when compared to Thailand and the Philippines. 60 per cent of future supply will locate in central areas.

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rce:

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Cambodia Factors

Cambodia office stock will see an increase of 64% by 2018, with 60 per cent of the incoming supply classified as Grade A and 40 per cent classified as Grade B.

Current Cambodia per capita retail space of 0.0087 sqm points to an undersupply, especially when compared to Thailand and the Philippines. 60% of future supply will locate in central areas.

At about USD 0.20/kwh electricity tariff, Cambodia has one of the highest tariffs in the region, which results in very good paybacks for efficiency improvements.

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