AFFORDABLE HOUSING GREEN BOND

The operation concerns the purchase of green bonds issued by IN'LI under its Green Financing Framework.

The aim is to finance green investments in affordable housing. The operation is aligned with the EU Framework for Urban Development and Regeneration, the EIB's Urban Lending Review (CA/496/16) in line with the EU Urban Agenda, the new Leipzig Charter for Sustainable Urban Development, the EU2020 Strategy for Smart, Sustainable and Inclusive Growth as well as the Energy Performance of Buildings Directive. As such, the project is eligible under Article 309 (c) common interest.

The proposed operation consists of the purchase by EIB of green bonds issued by the promoter, the proceeds of which will finance affordable housing within sustainable buildings. This green bond purchase will be part of the EIB Green Bond Purchase Program (GBPP), as described in the MC Note FC/-/ICA/2022-10194 on 26 July 2022 for this type of operation.

All the affordable housing will be located in the Paris Metropolitan region (Île-de-France). The current deficit of the housing sector in the greater Paris region is between 160,000 and 280,000 units. This operation is aiming at supporting this ambitious objective and includes approximately 800 households to be built or renovated in a period of six years (2023-2028). It will be rented to middle-income households at a price below the market rates for comparable housing.

The projects financed by the purchase of these green bonds will alleviate the current deficit of housing in supply-constraints areas in Paris, providing support to an underfunded sector and to a first-time issuer of green bonds in the affordable housing sector.

The projects are deemed aligned to a low carbon and resilient pathway, consistent with the Paris Agreement goals and principles as defined in the CBR. In addition, all new buildings should be aligned with the French standard (RE 2020) for Nearly Zero Energy Buildings. All renovated buildings are expected to reduce the building's Primary Energy Demand by more than 30%. Around 80% of the selected projects will obtain energy performance at least 10% better than the threshold required by the RE2020. Hence, the proceeds of the green bonds will finance projects that are expected to contribute to climate mitigation as per the EU taxonomy for sustainable finance and the Bank's Climate Action and Environmental Suitability objectives.

The EIB purchase for the first time of green bonds in the affordable housing sector may act as a catalytic effect for other operators in the social housing sector. It might multiply the investments in an underfunded sector that has to move towards its alignment with the EU taxonomy. Such alignment can also be supported through the purchase of green bonds.

The compliance with the relevant EU Directives was verified during appraisal: Environmental Impact Assessment (EIA) Directive 2011/92/EU as amended by Directive 2014/52/EU, EU Strategic environmental assessment (SEA) Directive 2001/42/EC, EU Habitats Directive 92/43/EEC and EU Birds Directive 2009/147/EC. In addition, EU Directive 2010/31/EU on Energy Performance of Buildings as well as the French standard RE2020 for nearly zero energy buildings.

The promoter achieves 80% of its development by purchasing new housing from developers, via VEFA (Sale in Future State of Completion) contracts. These contracts do not fall under the public procurement rules. On the remaining 20%, the promoter is the project manager and launches public call for tenders, in accordance with the public procurement code to find companies that carry out the project design and implementation.