Key drivers for green building project financing in Ghana

The majority of the literature on green buildings in Ghana focuses on environmental benefits, innovative designs, construction technologies and project management techniques. However, little is known about how such facilities are financed. This issue creates potential knowledge gaps, one of which this study aims to address. This study examines the key drivers for green building project financing in Ghana.

The study uses an explanatory sequential design with an initial quantitative instrument phase, followed by a qualitative data collection phase. An extensive critical comparative review of the literature resulted in the identification of eight potential drivers. One hundred and twenty-seven questionnaire responses based upon these drivers from the Ghanaian construction industry were received. Data were coded with SPSS v22, analysed descriptively (mean, standard deviation and standard error) and via inferential analysis (One Way ANOVA and One-Sample t-Test). These data were then validated through semi-structured interviews with ten industry professionals within the Ghana Green Building Council. Data obtained from the semi-structured validation interviews were analysed through the side-by-side comparison of the qualitative data with the quantitative data.

Though all eight drivers are important, the five key drivers for the Ghanian construction industry were identified as, in order of importance, “high return on investment”, “emerging business opportunity”, “ethical investment”, “conservation of resources” and “mandatory regulations, standards, and policies”. The interviewees agreed to and confirmed the importance of these identified drivers for green building project financing from validating the survey's key findings.

Key limitations of this study are the restrictions regarding the geographical location of the collected data (i.e. Kumasi and Accra); timing of the study and sample size (i.e. the COVID-19 pandemic making it difficult to obtain adequate data).

Though this study was conducted in Ghana, its implications could be useful to researchers, policymakers, stakeholders and practitioners in wider sub-Saharan Africa. For instance, financial institutions can invest in green buildings to expand their green construction and mortgage finance products to build higher value and lower risk portfolios. The findings from this study can provide investors with the enhanced certainty needed to help guide and inform their investment decisions, i.e. what to invest in, and when, by how much and how a scheme being “green” may influence their rate of return. Also, for building developers, it will give them a clearer understanding of the business case for green buildings and how to differentiate themselves in the market to grow their businesses.

This study's findings provide insights into an under-investigated topic in Ghana and offer new and additional information and insights to the current state-of-the-art on the factors that drive green building project financing.