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The financial support aims to alleviate an acute shortage of affordable housing in the country’s biggest city.
IFC, in a statement released today, states that the $7.5 million equity investment will support Nam Long’s plan to build more housing units under its EHome brand, which was launched 10 years ago as its first affordable-housing project.
Nam Long is a market leader of affordable-housing developments in Ho Chi Minh City at present. The company has sold more than 3,000 housing units, costing between $25,000 and $50,000 each. The costs equal two to four times the average annual income of most households in Ho Chi Minh City. This has contributed to fulfilling the estimated demand of about 70,000 housing units a year from low- to mid-income earners in the city.
“IFC’s investment is a stamp of approval for our competitive advantage in affordable housing and in Vietnam, especially given the funding constraints in the capital markets now. This also serves as recognition of our strong commitment to corporate governance and quality products,” said Nguyen Vinh Tran, chief executive officer of Nam Long Investment Corp.
In addition to the financing package, IFC is helping the company improve its environmental and social practices, and adopt higher energy-efficiency standards for its buildings.
With IFC’s advice, Nam Long is developing a pilot building with green features that comply with Vietnam’s Building Energy-Efficiency Code, which took effect on November 15 and aims to cut energy costs and greenhouse-gas emissions. The new building is expected to reduce energy consumption by 20 per cent and is a step toward raising industry standards and promoting sustainability and energy efficiency in Vietnam.
“Although the last few years have been challenging for Vietnam's property market, there is still strong, fundamental demand for affordable housing as Vietnam continues to urbanize,” said Simon Andrews, IFC’s regional manager for Cambodia, Lao PDR, Myanmar, Thailand, and Vietnam.
“Nam Long sets the quality benchmark for affordable housing in Vietnam with well-planned and well-built developments. By supporting the company, we help more of Vietnam's growing middleclass achieve their dreams of home ownership,” he added.