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Shelter Afrique, Infracredit to drive affordable housing with N200bn facility

Shelter Afrique, Infracredit to drive affordable housing with N200bn facility

Shelter Afrique Development Bank (ShafDB), a pan-African housing financing institution, and InfraCredit, a specialised infrastructure credit guarantee institution, are out to promote affordable housing in Nigeria with N200 billion facility.

This innovative affordable housing credit guarantee programme which ShafDB launched in Nigeria recently, according to the authorities of the Kenya-based institution, is geared towards financing and advancing housing, urban, and related infrastructure development.

Read also: InfraCredit guarantees N3bn initial debt financing for Modern Shelter affordable housing project

Thierno-HabibHann, managing director of Shelter Afrique, disclosed that the credit guarantee, programme, which is to be facilitated by InfraCredit, was aimed at developing 370 affordable housing units in Nasarawa Technology Village, assuring that the development would comply with the International Finance Corporation’s (IFC) green building standards – Excellence in Design for Greater Efficiencies (EDGE).

“The innovative financing structure has begun with the first pilot transaction of N3billion debt financing guarantee for Modern Shelter Systems and Services Limited, under a comprehensive affordable housing programme,” the managing director disclosed.

According to him, the N3 billion debt financing guarantee is part of ShafDB’s N200 billion affordable housing credit programme in Nigeria, recalling that, early last year, the housing financing institution visited Nigeria’s capital market with N46 billion bond issuance.

The bond issue was oversubscribed by 60.7 percent which was a reflection of the strong investor appetite in the country. The issue was also a starting point for the institution’s local currency funding to mitigate foreign currency risk.

Thierno-HabibHann explained that the financing guarantee structure between Shelter Afrique and InfraCredit marked a significant stride in addressing Nigeria’s housing deficit, with the overall project targeting the development of up to 1,200 EDGE-certified housing units in Nasarawa State.

“This initiative is a testament to ShafDB’s unwavering commitment to nurturing sustainable and resilient housing solutions, propelling positive transformation across the African continent,” he said.

He emphasised the institution’s commitment to “scaling up interventions in Nigeria in an integrated model, mitigating off-take risks, and providing beneficiaries with more accessible, affordable, and longer-tenured financing options, ultimately fostering sustainable development and prosperity.”

Chinua Azubike, InfraCredit’s CEO, said he was excited by the successful closing of this transaction and the significance of the project in the housing sector because of their ability to replicate and scale its impact.

He noted that the Nasarawa Technology Village project underscored a successful example of public–private partnerships as a mechanism for unlocking climate financing for sustainable development.

InfraCredit is an ‘AAA’ rated specialised infrastructure credit guarantee institution backed by the Nigeria Sovereign Investment Authority (NSIA), GuarantCo and InfraCo, KfW Development Bank, Africa Finance Corporation, and African Development Bank, to provide local currency guarantees and mobilise long-term debt financing for infrastructure in Nigeria.

It acts as a catalyst to attract domestic credit from pension funds, insurance firms and other long-term investors into credit-worthy infrastructure projects, thereby deepening the Nigerian debt capital markets.

The institution operates on a commercial basis with a developmental role and benefits from private sector governance. It also maintains the highest domestic financial strength ratings accorded to any financial institution by Agusto and Co. and Global Credit Ratings Co., two of the major domestic credit rating agencies.