The International Finance Corporation ( IFC ) has signed a memorandum of understanding with Cagamas, Malaysia’s National Mortgage Corporation, to advance green building finance and support the country’s sustainable development goals.

The collaboration aims to promote climate-smart investments in the housing and broader building sector and improve the capacity of financial institutions to issue green building finance products aligned with Malaysia’s climate goals, including green bonds, green credit lines, and financing for sustainable cooling technologies, according to a statement from the two organizations.

This will help financial institutions build pipelines of bankable projects and manage environmental, social, and climate risks in the building sector. Moreover, it facilitates dialogue and knowledge exchange on addressing barriers to sustainable housing development between the public sector and banking sector.

It also seeks to make green housing more affordable and accessible to lower-income groups and women in Malaysia by growing the market for green mortgage products and addressing other housing finance gaps.

This collaboration is the first engagement in the green building sector in Malaysia for IFC, which established a presence in the country in 2023.

Expanding the growing market for green building finance is essential for Malaysia to realize its goal of achieving net-zero emissions by 2050, presenting significant opportunities in this sector, according to IFC.

“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,” says Judith Green, country manager for the World Bank Group in Malaysia.

“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.”

Kameel Abdul Halim, president and chief executive officer of Cagamas, adds: “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.”