Shelter Afrique Development Bank (ShafDB), a pan-African housing financing institution based in Kenya, has introduced an innovative Affordable Housing Credit Guarantee Programme in Nigeria. This program, in collaboration with InfraCredit, a specialized infrastructure credit guarantee institution, aims to fund and promote the development of housing, urban, and related infrastructure.
The initiative is set to construct 370 affordable housing units in Nasarawa Technology Village, adhering to the green building standards of the International Finance Corporation (IFC) known as Excellence in Design for Greater Efficiencies (EDGE).
The unique financing structure has commenced with the initial pilot transaction of a N3 billion debt financing guarantee for Modern Shelter Systems and Services Limited, as part of a comprehensive affordable housing program. This initiative is a component of ShafDB's extensive N200 billion Affordable Housing Credit Programme in Nigeria. ShafDB had previously debuted a N46 billion bond issuance in Nigeria's capital market, oversubscribed by 60.7%, showcasing strong investor interest. The bond issuance enables ShafDB to secure local currency funding, mitigating foreign currency risks.
In conjunction with ShafDB's anchor investment in the Housing Solution Fund (HSF) to address the demand side, the institution is strategically mitigating risks in the housing ecosystem and value chain. The financing guarantee structure between Shelter Afrique and InfraCredit represents a significant step towards alleviating Nigeria's housing deficit, with the overall project aiming to develop up to 1,200 EDGE-certified housing units in Nasarawa State.
Nigeria, anticipating a population of 400 million by 2050, grapples with a housing deficit estimated at 28 million units, necessitating substantial investment. The HSF, sponsored by ShafDB through an off-take agreement, will facilitate affordable, long-term home loans for eligible homebuyers.
Managing Director of Shelter Afrique, Thierno-Habib Hann, highlighted the institution's dedication to sustainable and resilient housing solutions, fostering positive transformation across the African continent. He emphasized scaling up interventions in Nigeria, integrating models to mitigate off-take risks, and providing beneficiaries with accessible, affordable, and longer-tenured financing options to promote sustainable development and prosperity.
Chinua Azubike, CEO of InfraCredit, expressed excitement about the successful closing of the transaction and the project's significance in the housing sector. The Nasarawa Technology Village project exemplifies a successful public–private partnership unlocking climate financing for sustainable development.
InfraCredit, a 'AAA' rated specialized infrastructure credit guarantee institution, collaborates with various entities to provide local currency guarantees and mobilize long-term debt financing for infrastructure projects in Nigeria. The Housing Solution Fund (HSF), a local currency real estate investment trust (REIT), operates with a N100 billion funding program to stimulate housing demand and scale housing supply. Co-sponsored by Shelter Afrique, HSF recently received equity investment of N816 million from the institution.
Source: Business Day