NAIROBI, Kenya, Mar 15 – The National Housing Corporation (NHC) says it will focus on partnerships with financial institutions and development agencies to raise funds for development as prospects dim on floating its housing bond.
The corporation has on several occasions shelved the plan over what it termed as high cost of financing that would have a negative effect of developing affordable houses.
Speaking on Tuesday, NHC Managing Director James Ruitha said the slow pace of raising funds through a bond had forced the corporation to seek alternative avenues to mobilise resources for housing projects.
“We went back and then looked and asked ourselves does it make sense, are we floating a bond for the sake of it or are we going to have to float a bond that makes financial sense?” Mr Ruitha posed.
The corporation has intensified the search for financial partners since it put its Sh5 billion bond on hold.
When the government approved the bond in 2007, it failed to give any guarantees, which made the bond costly to float. This setback meant that NHC had to go through a credit rating test where it scored poorly going by its current financial position and its credit history.
While NHC has since improved its credit rating, Mr Ruitha said synergies with other financiers would prove more beneficial in developing low cost houses and fill the current housing gap.
He said through the partnerships, the corporation intends to develop 22,000 units in the next four years.
“We are looking at delivering those either by us doing the physical construction or facilitating because that is the only way we are going to upscale the house delivery system,” he said.
NHC has already partnered with the Iranian housing corporation for the development of 2,000 units in Mavoko, with the corporation only providing land and technical expertise. It has also teamed up with Kenya Commercial Bank, through its mortgage arm S&L, to fund construction of 800 housing units in Nairobi.
The housing corporation is set to commission a Sh700 million plant to manufacture industrial building materials (floors, walls and roofing panels) by July as part of its strategy of lowering building costs in the country.
He was speaking during NHC’s ISO 9001-2008 certification where he said the corporation was at advanced stages with six development partners to construct 2,370 housing units valued at Sh11 billion.
“Our quest for innovation products has seen us start the setting up of a factory to manufacture pre-fabricated building panels, which will revolutionize home construction,” he said.
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