Government adopts off-balance sheet-financing model in Uhuru’s housing project

President Uhuru Kenyatta with officials of Actis at State House Nairobi (PHOTO: Courtesy)

NAIROBI, KENYA: President Uhuru Kenyatta said the construction of decent and affordable houses for Kenyans will be put up through the off-balance sheet-financing model.

He said this model will not only remove a huge burden on treasury but will also ensure the construction of the houses under the Big Four agenda is expedited.

Under the off-balance sheet-financing, the government will not be required to pay any initial money to the contractor but has an obligation to assess its capacity and also demand for a bank guarantee and performance agreement.

The government will only be required to meet its financial obligations once the contractual agreements are met and the project completed.

Under this arrangement, the financier gets paid by the guarantor (bank) if the contractor breaches the agreement.

President Kenyatta said the proposed social housing project will provide affordable accommodation to people of both low and middle incomes.

Affordable Housing is one of the key pillars of President Kenyatta’s Government. The other pillars under the Big Four Agenda are manufacturing, Universal healthcare and food security-all aimed at boosting Kenya’s development, create wealth and employment for the youth.

The President spoke at State House, Nairobi when he met top officials of Actis led by Senior partner Mr Torbjorn Caeser.

Actis is a leading multi asset emerging market investor with a growing portfolio of investments across Africa, Latin America and Asia. It operates 12 offices across these continents.