Cagamas Bhd and the Asian Development Bank (ADB) have signed a technical assistance agreement to grow the green residential mortgage market in Malaysia for the affordable housing segment and housing in smaller towns.

According to Cagamas' president and chief executive officer Datuk Chung Chee Leong, the company seeks to make sure that lower-income homebuyers may access cheap green housing.

At the same time, it seeks to lessen the housing industry's total environmental impact.  

Real estate accounts for around 40 per cent of all carbon dioxide emissions worldwide.

The agreement with ADB was signed at the Cagamas-organised "Developing and Financing Green Housing in Asia" conference yesterday to examine and identify the obstacles that Malaysia faces in expanding inclusive and green residential mortgages.

The signing ceremony was witnessed by Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, Cagamas chairman Datuk Bakarudin Ishak, ADB Southeast Asia Department's regional cooperation and operations coordination director Alfredo Perdiguero, and Securities Commission Malaysia executive chairman Datuk Seri Awang Adek Hussin.

According to Chung, the study should be completed within a year.

He said details of the study will provide information on how the green mortgage market can be expanded to include B40, M40, and female-headed households.

"These can inform the issuance of a future Cagamas green bond/Sukuk to support these market segments," he added.

So far, Cagamas has issued sustainability-related bonds and Sukuk totaling RM1.7 billion.

Proceeds were distributed in accordance with its sustainability bond/Sukuk structure, which is in line with widely accepted market principles, norms, and best practises, to assist the development of Malaysia's social and green finance market.

Chung said that Cagamas has started the foundational steps to guarantee a sufficient supply of homes with green certification.

"There will be provision for more mortgages and green bonds and Sukuk," he said.

ADB's private sector financial institution division director Christine Engstrom said the support of green residential housing supply through sustainable construction methods to [ensure] proper standards and quality control, as well as ensuring adequate financing, are all of the utmost importance in assisting in this outcome.

https://www.nst.com.my/property/2022/09/833376/cagamas-aims-expand-market-green-residential-mortgages-affordable-housing