NAIROBI, Kenya, Dec 20 – Construction of 5, 000 affordable houses in Kenya has received a boost after the International Finance Corporation (IFC) committed to investing Sh3.08 billion in IHS Kenya.
The IFC’s equity co-investment with International Housing Solutions (IHS) will see the former take up a maximum stake that does not exceed 20 percent in a fund that has been set up to finance the affordable housing venture.
IHS has sourced funds from various institutional investors to invest in affordable housing in Kenya.
Its target area is the Nairobi metropolitan area, with expansion to other counties depending on demand.
A minimum of 15 percent of the funds committed shall, however, target areas outside of Nairobi.
“The 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 its 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).”
By the end of last year, IHS had raised more than Sh104.7 billion since 2008 in capital that has been deployed in six multi-investor funds, one single-investor fund, and 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 Kenya Kwanza administration, largely under a public-private partnership (PPP) model.
The push for more affordable houses in Kenya is informed by the annual housing deficit, which is estimated at 200,000 units.
