In a landmark transaction, Centum Real Estate (CRE) Limited has inked a USD 20.0 million partnership deal with the International Finance Corporation (IFC) aimed at supporting affordable housing expansion in Nairobi.
This comes three months after IFC disclosed details of the proposed loan in September. According to disclosures from the IFC, the funds will be used to partially finance Centum’s Mzizi Court project, consisting of 1,940 affordable housing units located within the Two Rivers development.
The total estimated Mzizi Court project cost is approximately USD 91.0 million, of which IFC will be financing 22.2% of the total project cost via the loan facility.
The remaining balance of USD 71.0 million will be funded by CRE, using a mix of equity, pre-sales from buyer deposits or collections, and reinvested profits from completed units.
It is expected that the project will increase access to quality housing at lower-priced points, which will help address the shortage of housing in Kenya and benefit families who currently cannot afford quality housing on the market.
Kenya’s housing supply by both the private sector and government is estimated at 50,000 units.
annually, against a persisting demand of 250,000 units annually. This translates to an 80.0% deficit, according to the Center for Affordable Housing Finance (CAHF).
The deal echoes IFC’s dedication and commitment to supporting innovative solutions to boost the development of sustainable, resilient, and affordable housing in developing nations.
IFC, an international financial institution that offers investment, advisory, and asset-management services to encourage private-sector development in less developed countries and a member of the World Bank Group, is a leading international investor in housing finance in emerging markets.
IFC has committed more than USD 7.0 billion to the sector since 2000, with an aggregate portfolio of USD
3.8 billion across 93 projects as of March 2023.
Notably, the deal actualization comes seven months after the gazettement of the Two Rivers land as
a private services-focused Special Economic Zone (SEZ).
The SEZ, spanning 64.0 acres, grants businesses within the Two Rivers International Finance and Innovation Centre (TRIFIC) access to a wide array of incentives available under the Special Economic Zone regime and positions Kenya as a hub for global investment and job creation by providing world-class infrastructure and amenities.
