Lender bets on green bonds to fund affordable housing projects in Africa : The Standard

Pan African housing development financier Shelter Afrique is betting big on green financing to fund its affordable housing projects across Africa. “Green financing offers cheaper options to fund projects whose bottom line directly impact the environment, like the construction, and as such we are making a strategic decision to add it to our funding mix,” said Shelter Afrique Chief Executive Officer Andrew Chimphondah. Chimphondah said they would engage with their partners to access this funding for affordable housing in Africa in the coming year. “There is a market for green financing in Kenya, South Africa and Nigeria since these countries have well established capital markets.

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“For instance, Kenya capital market has the capacity to support green bond not just for Kenya but also for the east Africa region. However, most capital markets across Africa need to be strengthened,” Mr Chimphondah said. Trends in Africa Kenya’s first green bond issued by Nairobi-based property developer Acorn Holdings for the construction of student housing this year raised Sh4.3 billion. Egypt is expected to make a debut in the green bond market in 2020.

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South Africa issued its first municipal green bond in 2014and the second green bond in 2017. Nigeria made a debut in the green bond market in 2017. “Our research from Shelter Afrique Centre of Excellence indicates that Africa is urbanising at a very fast rate thus exacerbating the continent’s housing crisis. “Our research also indicates that the continent requires more than $1.4 trillion in funding to be able to effectively address this growing housing crisis and innovative funding options like green bonds comes in handy,” the Shelter Afrique Chief Executive Officer said. In a 2018 report, ‘Climate Investment Opportunities in Cities’, International Finance Corporation estimates a cumulative climate investment opportunity of $29.4 trillion across six key sectors in emerging market cities through 2030. The IFC report also indicates that more than half of the world’s population lives in urban areas, a number that is expected to reach 70 per cent by 2050.  

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Shelter AfriqueAffordable HousingGreen BondReal Estate