The International Finance Corporation (IFC) has announced plans to co-fund the development of 5,000 affordable housing units in the Nairobi Metropolitan Area (NMA). The fund worth Kshs 2.96 Bn ($20.9 Mn) is set to be invested through the Investment Housing Solutions (IHS), a South African asset manager developing the aforementioned units. Precisely, the equity package will be invested through the IHS Kenya Green Affordable Housing Fund, IHS’ first ever multi-investor fund in Kenya launched in 2021.

“The proposed 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 is disclosures.

Notably, the investment will not exceed more than a 20% stake, given that IHS also has a target equity investment amounting to Kshs 19.8 Bn ($140 Mn), sourced from other institutional investors. 

Since its inception in 2008, IHS has raised over Kshs 104.7 Bn ($740 Mn) as at December 2022, with the funds mainly invested in its expansion and the development of green affordable projects in Kenya and South Africa. IFC’s fund therefore further boosts IHS’ initiative, which in turn promotes the implementation and delivery of Kenya’s Affordable Housing Program (AHP). 

The housing initiative, AHP, was launched in 2017 with an aim of delivering 500,000 by December 2022, in order to curb the existing 2.0 Mn housing deficit. Despite gaining traction and significant miles made over the years, it fell short of its goal owing to various setbacks, one major factor being financial constraints leading to projects stalling. IFC’s funding plan therefore boosts the government’s agenda of delivering 200,000 units p.a. 

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