AfDB approves Sh2.9 billion funding injection in Shelter Afrique to create affordable houses in Africa

AfDB approves Sh2.9 billion funding injection in Shelter Afrique to create affordable houses in Africa
  • Shelter Afrique has received a Sh1.9 billion subsidy to help it provide cheaper houses across the continent
  • Kenya’s housing deficit is estimated at 200,000 housing units per year
  • The high cost of housing has seen Kenyans take up only 24,000 housing loans over the past five or so decades

The African Development Bank (AfDB) will supply real estate developer, Shelter Afrique with a total of Sh2.9 billion in funding in a bid to help set up affordable housing in the continent.

AfDB has already disbursed an equity investment of $8.2 million (Sh850 million) in Shelter Afrique.

The lender announced on February 14, 2017, that it is also arranging for an immediate loan of $20 million (Sh2.1 billion) to the company to consolidate the position of the housing specialist for 2017 and beyond.

“These new resources show that the African Development Bank is fully committed to the growth and development of Shelter Afrique, which plays a vital and unique role in the development of affordable housing across Africa,’’ said Gabriel Negatu, Director General at AfDB’s East Africa Regional Development and Business Delivery Office.

The announcement comes at a time when Kenya’s housing deficit is estimated at 200,000 housing units per year, according to an analysis dubbed ‘The Report: Kenya 2016’, an annual publication of the Oxford Business Group.

Read  Also Kenya to benefit from Sh363 million AfDB infrastructure master plan grant

The high cost of housing has seen Kenyans take up only 24,000 housing loans over the past five or so decades.

“With the strong measures taken by Shelter Afrique to improve its governance and the support of its shareholders, the company can move to the next stage of its development,” added Negatu.

The African Development Bank participated in Shelter Afrique’s Extraordinary General Meeting, which was held on January 31, 2017, in Nairobi. At the EGM, shareholders present unanimously resolved to pay up their share capital commitments of approximately $116 million (Sh12 billion) as soon as possible or face temporary suspension from membership if not done by the end of 2017.

With additional equity support, Shelter Afrique will be in a stronger position to finance an increasing number of projects.

Shelter Afrique has announced that it will fundamentally improve its governance structure. Several interim executive managers are being contracted by the realtor’s Board to improve financial management and governance.

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The Board will also take appropriate disciplinary action to address irregularities and shortcomings identified in the company’s forensic audit report.

The Board also agreed to expand the organization’s shareholder base to include African and non-African impact investors this year and take Shelter Afrique to the next stage of its development. The African Development Bank intends to work with Shelter Afrique’s management and Board to support the company with technical and business development assistance throughout 2017.

Improving the quality of life for the people of Africa is one of the High 5 Priorities set by the Bank in 2015. Africa’s economic growth has not been rapid or inclusive enough to create enough jobs and improve the quality of life.

The Bank is committed to building up the availability of technical skills so that African economies can realize their full potential in high-technology sectors. Acknowledging the urgent need to address climate change, the Bank will nearly triple its annual climate financing to reach $5 billion a year by 2020.

 

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