Supporting an energy efficiency credit line for residential housing in India

The building sector is the largest consumer of energy in India, accounting for around 40 % of the total final energy use in the country. In the sector, residential buildings are the main users and account for approximately 70% of the sector's energy consumption. And the trend continues upwards. Forecasts predict a dramatic rise of the energy demand in the residential building sector. Main reasons are the strong increase in numbers of urban dwellings and the current trend that construction of houses in India is not very energy efficient. Given India’s substantial shortage in energy supply and the severe climate impacts of its rapidly increasing energy consumption, activities to improve the energy efficiency of the residential building sector are imperative.

In this context, the KfW Entwicklungsbank financed a Promotional Programme for Energy Efficient New Residential Housing in India. KfW provided a line of credit of 50 million Euros to the National Housing Bank (NHB) for refinancing individual home buyer loans for energy efficient new residential housing, meeting a minimum standard of 30 per cent improvement in energy efficiency over the benchmark building. The programme focused on typical, middle income apartment developments.

adelphi, in cooperation with its Indian partners The Energy and Resource Institute (TERI) and Environmental Design Solution (EDS), supported NHB in implementing the credit line. This involved technical assistance in identification and certification of developments, further development of energy efficiency loan products in the housing sector, marketing and branding of the NHB product, and training and capacity building.