Shelter Afrique, German bank in fresh $50m deal to push affordable housing

In a clear move to break Africa’s unaffordable housing jinx, Shelter Afrique, a pan-African development finance institution, has penned a $50 million finance deal with The German Development Bank (KfW) to support the continent’s real estate market.

The fund, which will be obtained by Shelter Afrique, will be used to support and finance construction of affordable homes by private and state-owned companies and for on-lending to commercial banks and micro-finance institutions.

In a statement obtained by BusinessDay, the firm says the loan signing comes at a time the dollar has increased value against the local currency, and will go a long way to complementing Shelter Afrique’s dollar liquidity ratio as well as providing competitively priced project finance products and lines of credit.

“This loan agreement represents the first of such agreements between the institutions, and sees Shelter Afrique commit to finding lasting and credible partnerships for the delivery of affordable housing,” James Mugerwa, managing director of Shelter Afrique, says, adding that it also represents an additional time that the pan-African institution will venture to Europe for finance partnership having already signed similar deals with the European Investment Bank (EIB).

The agreement also sees the German Development Bank increase its developmental footprint on the continent, having established a strong presence in several countries in sub-Saharan Africa and North Africa.

It would be recalled that Oumar Diop, Shelter Afrque’s West Africa representative recently told BusinessDay that the pan-African financial institution had set aside $200 million to invest in the Nigerian property market through a three-pronged approach that involved financing construction activities in the country and partnering developers to build affordable housing units.

According to Diop, the corporation will work with credible developers with strong track records and part of the funds will be disbursed to them to construct affordable housing units on the supply side.

Shelter Afrique is the only pan-African development finance institution that exclusively promotes the development of the housing and real estate sector in Africa. It is backed by 44 member countries, the African Development Bank (AfDB) and the African Reinsurance Company (Africa RE).

It currently has an active portfolio of projects in more than 30 African countries and it offers a wide range of financial products and advisory services to support the efficient delivery of affordable housing.

The German Development Bank is a competent and strategic advisor on current development issues and its goal is to combat poverty, secure the peace, protect the environment and the climate and make globalisation fair.

 

ODINAKA MBONU