KENYA – The International Finance Corporation (IFC), a member of the World Bank Group, has signed a new deal with Belco Realty LLP, a real estate development firm in support of affordable mixed use affordable living complex in Mombasa, Kenya.
The mixed-use affordable housing will consist of 1,379 residential units and over 4,500 square meters of retail and commercial spaces in Kongowea, Mombasa County.
Together with the Kenyan firm, IFC says the partnership will help meet surging demand for housing in Kenya.
Under the agreement, IFC will help identify suitable international strategic partners to invest equity of up to US$12 million in Belco and to provide the company with the necessary technical support to develop the project.
The development, known as Kongowea Village, will be developed to foster inclusive and affordable community living within the city.
Jumoke Jagun-Dokunmu, IFC’s Regional Director for Eastern Africa says the project, which will be located on eight acres within the heart of Mombasa city, will aim to be a catalyst for wider city regeneration.
The project will be developed to meet IFC EDGE certification requirements and will incorporate the latest technologies in passive cooling, energy efficiency and water conservation to support sustainable urbanization.
Kongowea Village is expected to create 1,160 jobs and business opportunities during the three-year construction period and many more after completion of the project within the themed retail arcade.
“Helping Belco identify the right partners for this project is expected to attract more developers to Kenya and other parts of Africa to help meet rising demand for housing”Jagun-Dokunmu – Regional Director Easten Africa, IFC
“Access to quality housing is a growing problem in Kenya and across Africa,” said Jumoke Jagun-Dokunmu, IFC’s Regional Director for Eastern Africa.
“Developers often target the high end of the market, but this project is aimed squarely at the lower-income bracket. Helping Belco identify the right partners for this project is expected to attract more developers to Kenya and other parts of Africa to help meet rising demand for housing,” he added.
“IFC‘s engagement with Belco will help Kenya support its rapidly growing and urbanizing population by increasing access to affordable housing. The problem is similar across most of Africa, where population growth and demand for quality housing are combining to outstrip supply. We are pleased to partner with a company such as Belco that is committed to contributing to solving this challenge,” said Emmanuel Nyirinkindi, IFC‘s Director for Transaction Advisory Services.
IFC’s partnership with Belco is part of its broader strategy to support better access to affordable housing in Kenya.
In 2020, IFC invested US$2 million in equity in the Kenya Mortgage Refinance Company (KMRC) to help increase access to affordable mortgages and support home ownership in the country.
According to the World’s Bank’s “Kenya Economic Update: Housing-Unavailable and Unaffordable” report, the country’s residential sector has reached a peak in demand with a nationwide housing deficit of 200,000 units annually and an accumulated deficit of over 2 million units. The report further estimated that 60% of Kenya’s urban families live in slums as they cannot afford better housing.
“Affordable Housing offers a unique investment opportunity to positively impact whole communities whilst attaining the highest standards of sustainability to help push cities towards a circular economy,” said Vijay Patel, Managing Partner of Belco.
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