$300 million fund to Africa for affordable housing

International Finance Corporation(IFC), a member of the World Bank Group, and Chinese multinational construction and engineering company, CITIC Construction Co., Ltd announced in Kenya's capital, Nairobi, on Friday the launch of a $300 million investment platform to develop affordable housing in sub-Saharan Africa.

The platform, CITICC (Africa) Holding Limited, will partner with local housing developers and provide long-term capital to develop 30,000 homes over the next five years. IFC estimates that each housing unit will create five fulltime jobs on the continent.

The platform, initiated as the demand for housing in sub-Saharan Africa, pushed by rapid urbanization, hasn't been well met in many regions. According to Oumar Seydi, IFC Director for Eastern and Southern Africa, more than 40,000 people migrate into cities in Africa every day. However, there are few local developers with the technical and financial strength to construct large-scale projects in Africa's housing market. Kenya's housing shortage, for example, is estimated at 2 million units. Nigeria also needs 17 million more units.

The IFC-CITIC Construction platform will work with local housing companies to develop affordable housing projects, ranging in size from 2,000 to 8,000 units, across Sub-Saharan Africa. It will start by developing homes in Kenya, Rwanda and Nigeria, and then expand to other countries.

CITIC Construction has a proven track record in constructing and delivering large- scale housing projects. In Angola, it has successfully completed a 200,000-units housing program in new city, Kilamba Kiaxi, and also built up relative infrastructure and utilities there in four years. The company did planning, financing, construction and post-construction operation in the program.

CITIC Construction has also founded the CITIC BN Vocational School (Angola) to help youth acquire the skills they need to become professionals。

"With the advantages of CITIC Construction's experience in engineering and its delivery capability, and also the advantages of IFC in financing and mortgage finance, the platform will invest in large-scale affordable housing communities and offer the middle class more affordable houses of international quality," said Hong Bo, assist president of CITIC group and chairwoman of CITIC Construction, in a press conference in Nairobi.

"As Sub-Saharan Africa becomes more urbanized, the private sector can help governments meet the critical need for housing", said Oumar Seydi, IFC Director for Eastern and Southern Africa."The platform will help transform Africa's housing markets by providing high quality, affordable homes, creating jobs, and demonstrating the viability of the sector to local developers. IFC will work with financial institutions to support mortgages and housing finance that will allow people to purchase the units."

The new housing units will be constructed in accordance to IFC's green building standards, delivering homes that are environmentally friendly and sustainable, he said.

The World Bank Group estimates that by 2030, three billion people, or 40% of the world's population, will need new housing units. To date, IFC has invested more than $3 billion in housing finance in more than 46 countries worldwide. IFC focuses on regions where large portions of the population live in sub-standard housing and have limited access to credit to build, expand, or renovate their homes.