The International Finance Corporation (IFC) plans to invest Kshs 2.9 billion (USD 20.9 million) in a Southern African asset manager, the Investment Housing Solutions group of companies (IHS), that is involved in the development of 5,000 affordable houses in Kenya. According to the IFC, this equity co-investment with IHS will result in the IFC holding a stake of up to 20.0% in a fund established to finance the affordable housing project. The fund aims to secure equity investments of up to Ksh19.8 billion from various institutional investors.
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Initially targeting the Nairobi metropolitan area, the affordable housing project may expand to other counties based on demand. However, at least 15.0% of the capital committed to the fund will be directed towards areas outside of Nairobi. The proposed investment by the IFC will involve a co-investment package of up to Kshs 2.9 billion alongside IHS Kenya Green Housing Partnership LLP and IHS Kenya Green Housing Fund. This investment will support the development and acquisition of approximately 5,000 newly built, resource-efficient, and environmentally friendly affordable housing properties in Kenya. IHS has successfully raised over Kshs 104.7 billion since 2008, which has been deployed in multiple funds, while the IHS Kenya Green Affordable Housing Fund, launched in 2021, is a recent addition to their portfolio.
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The affordable housing initiative is a key component of Kenya’s Big Four agenda and has gained momentum under the Kenya Kwanza administration. This drive stems from the annual housing deficit of approximately 200,000 units in Kenya, as high land costs, low income levels, and limited access to affordable long-term financing have hindered the growth of the mortgage market. To address this, the government, World Bank, lenders, and financial institutions established the Kenya Mortgage Refinancing Company (KMRC) to provide long-term funds to primary lenders, such as banks, with the aim of facilitating affordable home loans for Kenyan citizens.
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