The International Finance Corporation (IFC) has concluded and signed an equity investment worth Ksh3.08 billion ($20.9 million) into International Housing Solutions (IHS) Kenya, a US-owned Southern African Private Equity fund manager that is developing 5,000 affordable houses in Kenya.
The deal was signed on 15th December 2023 at the IFC/WorldBank Kenyan headquarters in Upperhill, Nairobi. Signing the deal was Mr Henrik Elschner Pedersen, IFC’s Regional Industry Director for Manufacturing, Agribusiness & Services, Africa; Mr Peter Mayavi, IHS Kenya Managing Director for Capital and Investor Relations, and Mr Kioi Wambaa, IHS Kenya Managing Director for Investments and Assets Management.
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The IFC’s equity co-investment with the International Housing Solutions in the project will see it take up a maximum stake that does not exceed 20% in a fund set up to finance the affordable housing venture. IHS has sourced funds from various institutional investors to invest in affordable housing in Kenya.
Its target area is the Nairobi metropolitan area with expansion to other counties depending on demand. A minimum of 15% of the funds committed capital shall, however, target areas outside of Nairobi.
“The IFC investment is an equity co-investment package by IFC of up to €19.3 million (approximately $20.9 million) to invest along with IHS Kenya Green Housing Partnership LLP and IHS Kenya Green Housing SCSp (the Fund) in the development and acquisition of approximately 5,000 newly developed, resource-efficient, green affordable housing properties in Kenya,” said the IFC in is disclosures.
The proposed IFC investment will consist of up to €10 million (approximately $10.9 million) from IFC’s own account and up to $10 million equivalent in euros (app. €9.3 million) from IFC acting as the implementing entity of the UK-IFC Market Accelerator for Green Construction Program (MAGC).
By the end of last year, IHS had raised more than $740 million (Ksh104.7 billion) since 2008 in capital that has been deployed in six multi-investor funds, one single-investor fund and listed a publicly traded REIT in Johannesburg.
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IHS Kenya Green Affordable Housing Fund was launched in 2021. The affordable housing drive in Kenya was put in place as one of the Big Four Agenda items by the previous administration.
It has picked pace over the past year after being identified as one of the key policy areas by the Kenya Kwanza administration, largely under a Public Private Partnership (PPP) model. The push for more affordable houses in Kenya is informed by the annual housing deficit that is estimated at 200,000 units.
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