7 October 2013
A new fund set up for affordable housing in South Africa and Ghana has received a $63m kick-start from institutional investors.
World Bank Group member IFC and the National Housing Finance Corporation of South Africa (NHFC) will invest $25m and $38m respectively in the fund set up to develop homes for sale and rent, as well as student accommodation, in South Africa, Ghana, and possibly other countries.
Private equity investor International Housing Solutions (IHS) hopes its new fund will eventually attract $300m.
The fund, called IHS Fund II, will make financing available to local developers. IHS expects investors to see returns on their money within 10 years.
Investment in the new fund will support the development of affordable housing in South Africa and sub-Saharan Africa (NASA/Wikimedia Commons)
An earlier fund raised more than $230m to build 27,500 units by 19 local developers from a total of 35 separate investors, IHS said. It hopes the first $63m from IFC and NHFCSA will encourage other investors to participate.
IFC believes affordable housing is a promising market.
"The IHS Fund II offers an attractive opportunity for private investors to gain access to a fast-growing market with significant positive social impact," said its senior manager for Southern Africa, Saleem Karimjee.
NHFC CEO, Samson Moraba, said: "We firmly believe that our strategic partnership with IHS will unlock the delivery of housing at scale, and ultimately lead to the creation of sustainable and attractive communities."