US announces KSh3 billion funding to build 5,000 affordable houses in Kenya
US through the International Finance Corporation (IFC)to build 5,000 affordable houses in Kenya
US through the International Finance Corporation (IFC)to build 5,000 affordable houses in Kenya.
The International Finance Corporation (IFC) is set to make an equity investment worth Sh2.96 billion ($20.9 million) in a US-owned Southern African asset manager that is developing 5,000 affordable houses in Kenya.
In recent disclosures, the IFC stated that as part of its equity co-investment with the Investment Housing Solutions group of firms (IHS) in the project, it will have a maximum ownership position of no more than 20% in a fund created to finance the affordable housing project.
The fund’s target equity investment, which will come from a variety of institutional investors, is up to €130 million ($140 million/Sh19.8 billion).
The Nairobi metropolitan area is its objective, with the possibility of expanding to additional counties based on demand.
A minimum of 15 percent of the funds committed capital shall, however, target areas outside of Nairobi.
“The proposed IFC investment is an equity co-investment package by IFC of up to €19.3 million (approximately $20.9 million) to invest along with IHS Kenya Green Housing Partnership LLP and IHS Kenya Green Housing SCSp (the Fund) in the development and acquisition of approximately 5,000 newly developed, resource-efficient, green affordable housing properties in Kenya,” said the IFC in is disclosures.
“The proposed IFC investment will consist of up to €10 million (approximately $10.9 million) from IFC’s own account and up to $10 million equivalent in euros (app. €9.3 million) from IFC acting as the implementing entity of the UK-IFC Market Accelerator for Green Construction Program (MAGC).”
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By the end of last year, IHS had raised more than $740 million (Sh104.7 billion) since 2008 in capital that has been deployed in six multi-investor funds, one single-investor fund and listed a publicly traded REIT in Johannesburg.
IHS Kenya Green Affordable Housing Fund was launched in 2021.
The affordable housing drive in Kenya was put in place as one of the Big Four agenda items by the previous administration.
It has picked up pace over the past year after being identified as one of the key policy areas by the Ruto administration, largely under a Public Private Partnership (PPP) model.
The push for more affordable houses in Kenya is informed by the annual housing deficit that is estimated at 200,000 units.
As a result, the government together with the World Bank, lenders, and other financial institutions, teamed to form the Kenya Mortgage Refinancing Company (KMRC), which is disbursing loans to primary lenders such as banks in the form of long-term funds, with the goal of unlocking affordable home loans for Kenyans.
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