NAIROBI, Kenya, Apr 3 – Housing Finance has signed a Sh400 million loan agreement with UN – Habitat for construction of low-cost houses in Mavoko municipality.
Housing Finance (HF) Managing Director Frank Ireri said the agreement entails financing the development and ownership of the housing units for an initial 100 beneficiaries.
“The partnership will demonstrate the viability of availing housing to the low income earners through commercially viable terms and aims at attracting private long term capital for investment into scaled housing supply,” Mr Ireri said.
UN-Habitat’s Executive Director, Anna Tibaijuka, said the project would invest in environmentally sound infrastructure and services for planned controlled settlements.
Ms Tibaijuka said UN Habitat, under it’s Water & Sanitation (WatSun) Program will develop trunk infrastructure of which costs could be recovered from end users on a pro-rata basis.
“The project will field-test low income housing development as well as provide housing loans to low income households in an area where land and infrastructure are partially subsidised,” she said.
The UN-Habitat boss said the project will be implemented under an Experimental Reimbursable Seeding Operations (ERSO) initiative which seeks to facilitate low income earners to meet the cost of housing through favourable terms in a commercial environment.
She said the culmination of this project follows a framework agreement signed between Housing Finance and UN- Habitat in February 2008 that established the terms of co-operation for the provision of decent low cost shelter in planned urban settlements.
Ms Tibaijuka said the collaboration will enable both organizations to be more effective in their programs that are geared towards provision of affordable housing.