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UK to pump Sh20 billion into Uhuru Big Four legacy projects

BUSINESS
By Graham Kajilwa | July 28th 2021

The 228 completed units out of 1370 being constructed by the government at Park road Nairobi under the affordable housing program.[Standard]

About Sh9 billion of the cash will fund the government’s 500,000 affordable housing plan among other key projects.

President Uhuru Kenyatta’s visit to the United Kingdom (UK) has come with a Sh20 billion bag of goodies to support the country’s Big Four Agenda.

Of this, Sh9 billion will fund the government’s 500,000 affordable housing plan. Other big four plans are manufacturing, universal health coverage, and food security.

The Sh9 billion comprises Sh5.2 billion UK Aid support.

The rest, Sh3.5 billion to be matched by private investment, will fund up to 10,000 homes using green technology.

United Kingdom Climate Investment (UKCI) and FSD Africa Investments (FSDAi) have committed to support the project.                                                              

A statement from the British High Commission, Nairobi, indicated that Sh67 million will support green manufacturing, Sh550 million (new funding) to accelerate Kenya’s climate change transition, including renewable energy, clean cooling and forest restorations such as Kaptagat Forest in Elgeyo Marakwet County.

About Sh2.7 billion of the cash will boost the digital customs system to ease trade. President Kenyatta is in the UK for a three-day State visit.

The 10,000 homes will be put up using modern technologies, according to a statement from UKCI, with the units expected to go for Sh4.5 million with a monthly rental income of between Sh15,000 and Sh50,000.

Managing Director of UKCI Richard Abel described the initiative as a milestone with the investment representing an opportunity to model how sustainable building designs can help fight the effects of climate change.

“The need for affordable housing in Kenya is greater than ever with urban populations increasing by more than four per cent in the last five years. Our investment in meeting this need will benefit thousands of Kenyans currently without affordable housing,” he said.

UK High Commissioner to Kenya Jane Marriott said the Kenya-UK partnership to put up 10,000 green homes will not only help in closing the housing gap, but also provide new green jobs that will last.

“I am delighted that this British initiative has successfully attracted new investment and I hope it will lay the groundwork for further investment in the sector, especially in the run-up to COP26 (United Nations Climate Change Conference of the Parties),” she said.

Kenya has a shortage of about two million housing units with the industry able to deliver only 50,000 units annually compared to a target of 250,000 units.

“Through the delivery of this project, UKCI will help to embed international green standards in the Kenyan housing market. The investment will also support the development of the sustainable building as a new green asset class for local investors, readying Kenyan institutional capital to further invest in the sector,” reads the statement in part.

Affordable housing

Chief Investment Officer at FSD Africa Investments Anne-Marie Chidzero said the Open Access platform will address key factors that prevent financial markets from playing a bigger role in affordable housing in Kenya.

Open Access is a housing market intelligence portal led by the Centre for Affordable Housing Finance in Africa (CAHF) with support from FSD Kenya.

It is designed to provide housing finance investors with the data they need to make investment decisions.

CAHF Executive Director Kecia Rust said there was lack of consistent and reliable data to evaluate the affordable housing market.

“Our Open Access initiative will work with investors and developers to collect data, which will then be packaged as reliable intelligence on the housing market to guide the stakeholders towards best actions for sealing the existing housing gaps,” she said.

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