afdb approves 39m loan to finance affordable housing in south africa
Last Updated : GMT 09:07:40
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Last Updated : GMT 09:07:40
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AfDB Approves $39m Loan to Finance Affordable Housing in South Africa

Egypt Today, egypt today

Egypt Today, egypt today AfDB Approves $39m Loan to Finance Affordable Housing in South Africa

African Development Bank Group
Abidjan - QNA

The Board of Directors of the African Development Bank Group (AfDB) has approved a Senior Loan of ZAR 570 million (US$39 Million) to South Africa’s Housing Investment Partners Trust 2 -HIP2, also known as Vulumnyango Trust, to help finance affordable housing programmes in the country.

    The loan will help improve access to long-term affordable housing finance to South Africa's lower-middle income earners currently with limited opportunities to access affordable mortgages, according to AfDB.

    It will also consolidate the growth of a strong affordable housing sector within South Africa. The project provides a demonstration effect of tapping local currency capital from Africa’s premier development bank, local asset managers and a State Owned Enterprise to foster South Africa’s economic growth through affordable housing.

    The project also reduces fiscal pressures on the South African government in respect of housing for a specific market segment and enables HIP2 to mobilize funding from other sources, including eventual access to South Africa’s capital markets.

    Although South Africa is one of the more developed economies in Africa, the country still faces acute shortage of affordable housing in its main urban areas, estimated at 3 million units in 2014.

    This has resulted in more than 2,600 informal settlements springing up around 70 of South Africa's major urban areas, making it very difficult for the government to reduce inequality and achieve inclusive growth targets.

    Despite several government direct interventions in the sector, especially through the Reconstruction and Development (RDP) program which between 1994 and 2015 delivered over 2.9 million low cost houses for vulnerable and low income households, the housing needs of the lower-middle income earning households (otherwise referred to as the Gap Market) remain huge and unaddressed. HIP 2, which has now raised ZAR1.82 billion from National Housing Finance Company, Old Mutual Group, Future growth and AfDB is targeting at offering more than 4,000 affordable mortgages to South Africa’s lower-middle income earners.

    The intervention will generate other significant benefits including moving 2,500 – 6,500 out of informal settlements and create about 3,250 permanent jobs mainly for the youth. Overall, financing 4,386 affordable housing units is expected to generate over 10,000 jobs, including 950 - 1,296 direct jobs for women.

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afdb approves 39m loan to finance affordable housing in south africa afdb approves 39m loan to finance affordable housing in south africa



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