Investors pump US$26bn into Kenya’s affordable housing plan

Kenya – the affordable housing plan, a low cost housing initiative as part of President Kenyatta’s agenda, has received investment pledges running into US$26 billion (Kshs 2.6 trillion) to finance the 500,000 house units project.

“We have received investment offers of US$26 billion from all over the world towards affordable housing,” Charles Hinga, the Housing Principal Secretary told a session of the Public Accounts Committee (PAC).

Among the major investorS includes the United Nations Project Services (Unops) which injected Sh1 billion (US$10 million).

Unops executive director Grete Faremo said the seed funding is aimed at attracting other development partners to chip into the project expected to raise US$646.54 million for 100,000 housing units.

Others include the World Bank which pledged its support to the Kenyan government in in October last year.

Carlos Felipe Jaramillo, World Bank’s Kenya Country Director, during a World Bank organized forum that explored innovative measures to expand the fast growing Kenyan cities and said targeted incentives are important in promoting investments in homes for the low income bracket.

“We are ready to assist the Kenyan government deliver on its affordable housing agenda. Targeted incentives are required to promote investments in homes for the low income bracket,” said Jaramillo.

According to Charles, the government has already established a legislative framework to facilitate private investments as it seeks to partner private landowners to implement a development blueprint on affordable housing.

Government statistics indicated that Kenya has an annual housing deficit of 200,000 units.

The project runs partly under the Kenya Mortgage Refinance Company and seeks to make available affordable mortgage finance by the end of 2022.

The mortgage finance company will also extend the tenure of housing loans from the current average of seven years to at least 20 years and assist in driving interest rates on mortgages to single digits.

According to James Macharia cabinet secretary for housing and urban development, the housing units will be divided into a social housing costing a maximum of US $6,000 and a bedsitter housing plan costing a maximum of US$8000.

Additionally, a 2-bedroomed will cost US $10,000 and a 3-bedroomed for US $20,000.

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