EIB seeks to boost affordable housing in sub-Sahara
26 June 2013, 17:18
Nairobi - The European Investment Bank (EIB) on Wednesday provided 15 million euros to specialist development finance institution Shelter Afrique to provide affordable housing in sub-Saharan Africa.
EIB VP responsible for sub-Saharan Africa Pim van Ballekom said in Nairobi the funds will help address the significant challenges of low cost housing, contribute to poverty reduction and go a long way towards achieving MDGs.
"Access to affordable housing, clean water, sanitation and power is essential for economic and social development. However this remains an exclusive privilege and there are acute shortages of affordable housing in many African countries," he said in Nairobi.
Ballekom said the funding will help communities in sub-Saharan Africa to benefit from the development of affordable housing and the provision of water, sanitation and electricity.
The EIB-supported Shelter Afrique lending initiative is expected to particularly benefit SME-type developers, whose capacity Shelter Afrique would contribute to further build up.
The partnership comes as Kenya is currently undertaking a national survey to determine the extent of the housing shortage amid complaints rapid urbanization was fueling the growth of filthy homes in cities.
Kenyan officials say there has been very rapid urbanization over the last few years and this has resulted to putting up of buildings whether residential or commercial haphazardly without regard to precautions of user compatibility.
The country has a shortage of descent houses in most of its towns and cities. The shortage is currently estimated at 250,000 housing units a year, although housing and estate development firms have the potential to produce 50,000 homes a year.
The overall initiative is expected to stimulate total housing investments of around 50 million Euros with significant local job creation. Shelter Afrique can finance a maximum of 60 percent of the development cost of an eligible project.
To benefit from the program, each housing project must be technically sustainable and financially viable. Priority will be given to development of affordable housing in urban centers and in areas linked to existing transport and basic infrastructure.
Shelter Afrique MD Alassane Ba said he strongly believe that this new strategic partnership is only the beginning of a long and fruitful relationship between our institutions.
"We thank EIB for trusting Shelter Afrique and recognizing its key role for housing and urban development in Africa," Ba told journalists in Nairobi.
"We praise EIB for this first and bold commitment to support and strengthen Shelter Afrique to enable it to potently deliver on its mandate and mission to facilitate access to housing for all, thereby promoting development throughout Africa for the betterment of the living conditions of our People."
Under the initiative, Shelter Afrique will provide EIB backed loans to local developers engaged in the construction of eligible affordable housing estates - including the provision of related community infrastructure and services such as clean water, sanitation, power and roads, as well as site clearance and preparation.
It is expected that projects will be developed in a number of sub-Saharan countries, starting with Kenya and Rwanda and that schemes will be integrated into relevant national and local urban development plans.
The EIB will also provide to Shelter Afrique with technical assistance to help improve the preparation, planning and implementation of affordable housing projects and the loans extended to developers will benefit from an interest rate subsidy reflecting the expected significant social and environmental impacts of selected initiatives.
Shelter Afrique is the only pan-African development finance institution that exclusively promotes the development of the housing and real estate sector in Africa.