How is the IFC Energizing Green Housing? Prashant Kapoor Is On It, Part 1

Published: Saturday, May 2nd, 2015 by Lenora

The Developing Smart Cities site is increasingly driven by the manifesto to strengthen the links of the affordable housing ecosystem in emerging and developing markets – a topic that Debra Erb passionately wrote on recently. We were so impressed with how the EDGE software represents this mission that we decided to follow up on our recent blog post to do a deeper dive with Prashant Kapoor, IFC’s Principal Green Building Industry Specialist and the entrepreneur who invented EDGE.

Nam Long’s EHome 5 in Vietnam

Nam Long’s EHome 5 in Vietnam – an IFC EDGE project

Prashant came to IFC tasked with helping the multilateral development finance institution integrate green building principles into its commercial and residential projects. IFC sent him off to markets as diverse in resources, climate and capacity as South Africa, Indonesia, Mexico and Cape Verde. Yet, even with his extensive background in green building, he found himself at a loss. To suit these clients’ needs, he needed a flexible tool to show that green building makes economic sense in developing markets.

This was no small challenge. His target market was spread throughout the real estate and construction value chain. Although curious, developers are still learning about high performance building in many developing markets. Governments first focus on building and energy efficiency codes left them racing to keep up with foreign corporate investments and rapidly growing middle class appetite for housing, shopping and services.

Value: The Big Question. How could Prashant convince such a broad audience of the value of green building amid other pressing business and financing challenges? Prashant was no stranger to these challenges. He worked on the development of the EcoHomes rating tool for BRE (the residential version of BREEAM) in the UK and on an information platform to identify materials and equipment for high performance building in developed markets. He had also brought his expertise to the Masdar project in Abu Dhabi, so adaptation to climate extremes was of particular interest.

Prashant wanted to be able to the critical questions that IFC clients had. What are the most effective sustainable design interventions for a particular location? Can these interventions remain tightly focused on specific performance factors like energy efficiency to achieve tangible operational results? Is it possible to show whether a particular design element will be worthwhile and over what time period? The answers vary dramatically from country to country. Through their engagements, the team learned that insulation has a 100-year payback in Indonesia. In Cape Verde, solar shading has immediate payback for diminishing solar heat gain. Canned answers simply wouldn’t work.

While advising on green building codes in Indonesia and Colombia, Prashant arrived at the idea of a software tool to quickly help a client answer the most pressing up-front questions about green design. Mexico’s experience with green building inspired him. Infonavit approached the challenge from the bottom up, starting with affordable housing. It simplified the definition of green building specifically for affordable housing and then instituted a proprietary inspection framework to execute efficiently for this fast-growth, low margin market. By contrast, the USGBC has more of a top-down approach. The organization’s initial focus on commercial real estate didn’t fit the most pressing need in Mexico.

Prashant wanted a new solution. The solution would have to achieve large-scale impact because affordable housing developers roll communities out quickly with minimal design typologies, high volume, rapid development and industrial techniques. Mexico’s affordable housing industry now appears to have grown too quickly with a too narrow definition of sustainability. Even so, the business reality illustrated a key lesson for the EDGE software’s development.

Any solution would have to improve on current offerings. Certifications such as LEED would layer on too many costs for affordable housing developers with no assurance of long-term energy efficiency for developers to sell to investors and buyers. The building’s operational performance is more tangible to people in developing countries, and variables like light pollution reduction and indoor environmental quality could distract from the critical performance factors. Finally, international certifiers usually need modelling software to demonstrate compliance, also costly. As a result, affordable housing developers were effectively locked out of the conversation about sustainability.

Enter EDGE. By setting an achievable and meaningful standard of 20% water, energy and material efficiency, the EDGE software boiled the key inputs down to help speculative builders identify the best solutions, apply a practical standard and gain an branded “endorsement.”

EDGE responds to IFC business needs in being robust across geographies and building typologies with a limited footprint on the bandwidth of the developer. The software can already deliver preliminary assessments for 100 countries in five segments – residential, retail, offices, hospitals and hotels. Our blog found that the tool could deliver initial guidance quickly and easily for exploration purposes. It seems to give a developer an entry point to deeper analysis.

Getting from design recommendations to cost is another important leap. The EDGE software builds in costs for design recommendations generated by the system – a ballpark estimate but sufficient to illustrate the value of going green and commit to the next step.

Building on EDGE. In order to act as a catalyst for sustainable design and green building in developing markets, IFC ultimately needed a vehicle for driving adoption, disseminating across users and strengthening institutional players.

You can now read the part 2 of this article: IFC’s EDGE: Products for the Housing Value Chain, Part 2