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Chinese firm to fund Kenya's housing projects

BUSINESS
By Lee Mwiti | June 10th 2016

A Chinese firm will fund State projects aiming to bridge the current shortfall of 200,000 housing units.

This follows talks between Transport, Infrastructure, Housing and Urban Development Cabinet Secretary James Macharia, who is currently on a visit to China, and the company, CADfund. During the deliberations, CADfund committed to invest in a number of housing projects and provide capital for the same.

An Africa-focused equity investment fund launched by the Chinese government, the nine-year-old CADfund supports Chinese firms investing in Africa and seeks Chinese partners for African projects. Its support comes in the form of infrastructure, funding and skilled personnel.

The Government is keen to address the housing shortfall in Kenya, which is currently estimated at 200,000 units a year, by tapping into the private sector. It is also under pressure to build inventory for its cadres, like the proposed 80,000 houses for the armed forces.

Another priority area for the Government is to improve take-up of mortgages from the current low levels of 20,000 to at least 100,000. One area in which the Government is already working with the private sector is the development of affordable housing. A good example is the proposed Ngara City Project, in which it is seeking CADfund’s support for the Chinese contractors involved.

CADfund is not new to Kenya and has already made contact with Kenyan housing developer Suraya to develop housing projects in the country. These include the proposed development of over 10,000 affordable housing units, which will be available to civil servants at discounted prices and to the public. The partnership between CADfund, Suraya and Chinese contractor (CCECC) China Construction Engineering Consultant Corporation, is also expected to result in 20,000 new houses for the police force, which is currently under-served.

Innovative financing

Earlier, Mr Macharia had met some 25 Kenyan students studying railway engineering at the Beijing Jiantong University, thanks to academic scholarships from the China Road and Bridge Corporation (CRBC), the contractor for the Standard Gauge Railway.

The CS also had occasion, at the beginning of the tour, to attend the 7th International Forum on Infrastructure Investment and Construction, in Macau. As a panellist, he had a chance to showcase Kenya’s adoption of innovative financing on large infrastructure projects.

He also used the platform to woo private sector players and governments to participate in the financing and development of Public Private Partnerships (PPPs) in Kenya and the LAPSSET (Lamu Port South Sudan Ethiopia Transport) Corridor.

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