Affordable And Energy Efficient Housing Development

Housing with green panels

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Affordable And Energy Efficient Housing Development
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Real Estate
Business Model Description

Invest in B2B/B2C models engaged in building affordable homes for the population in peri-urban informal settlements with a focus on sustainability. The focus is especially on 'ger districts' that are located on hills and mountains surrounding Ulaanbaatar. They have schools, stores and hospitals. However, they do not have paved roads and there is seemingly no organization or layout to how the buildings and gers are arranged. The people that live here have often migrated to Ulaanbaatar from the countryside, or they are the children of migrants. They are typically from low-income segments and lack facilities that are otherwise available to more affluent population segments. Examples of companies active in this space are:

Hybrid House LLC, founded in 2017, constructs energy and water-efficient buildings and distribution of solar energy equipment and other energy-efficient construction materials. The Company has the capacity to build 20-40 houses per year by importing building materials. It intends to expand its operations by establishing a factory that manufactures energy-efficient building materials.

Under the pilot housing financing, scheme in cooperation with the Mongolian Bankers Association (MBA) and the Mongolian Sustainable Finance Association (MSFA/ ToC), households in off-grid areas were enabled to switch from burning coal to living in energy-efficient standalone houses with up to 80 percent less (heat) energy consumption.

Commercial banks in cooperation with international organizations have implemented a pilot subsidized loan program for energy efficient houses. By the end of 2021, a total of 26 EE houses were built through the subsidized pilot.

Expected Impact

Benefitting the wellbeing of peri-urban informal settlement (ger district) population and address their health and safety concern

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
15% - 20% (in ROI)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Sustainable Cities and Communities (SDG 11) Good health and well-being (SDG 3) No Poverty (SDG 1)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Clean water and sanitation (SDG 6) Affordable and Clean Energy (SDG 7) Reduced Inequalities (SDG 10)
Sector Sources
  • (1) World Bank. (2018). TCData 360 Mongolia, (2) Government of Mongolia. (2019). Mongolia Voluntary National Review Report 2019:Implementation of the Sustainable Development Goals." (3) United Nations Children's Fund (UNICEF) in Mongolia. (2023). Climate Change. (4) Green Climate Fund (GCF). (2018). Funding Proposal for Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Project. (5) Asian Development Bank (ADB). (2018). Mongolia Gender Situational Analysis
IOA Sources
  • (6) German Agency for International Cooperation or (GIZ). (2022). Energy efficiency in the Building Sector for a More Sustainable Mongolia (7) National Statistics Office (NSO) (8) Government of Mongolia, United Nations Mongolia and Joint SDG Fund. (2021). Integration of Gender Responsive Financing Practices in Mongolia’s Financial Sector