Tawanda Musarurwa & Enacy Mapakame
Pan-African finance institution, Shelter Afrique this year availed US$20 million in lines of credit to local banks for housing projects.
This takes the financier’s disbursements largely to the country’s financial institutions to US$47 million.
Said Shelter Afrique managing director Andrew Chimphondah this week:
“With regards to financial institutions in 2019 we actually approved at least US$20 million to institutions that are local, CABS and CBZ for example, and we intend to roll out more of these facilities going forward.”
Chimphondah said its products are structured with the end goal of achieving efficient delivery of commercial real estate and affordable housing.
“We recognise that the key challenges with construction finance is not having institutions that understand the construction life-cycle. In many countries (there is) a lack of understanding of that project life-cycle vis — vis the financing that’s provided. Developers end up going into default before the projects start.
“When you look at the value chain, from the minute the land is identified, zoned and then infrastructure is built.
“What we are saying is we have a package that looks at the total life-cycle and matches the funding with the life-cycle, which you don’t get with local institutions. The reason that we do that is because the success of large-scale affordable housing units needs a financier that understands construction, that understands project funding for it to succeed.”
Zimbabwe has been a member of Shelter Afrique since 1993.
The pan-African financier has a list of collaborating financial institutions which provide funding for onward lending in the real estate and housing arena within the continent. Partner funding sources including the Netherlands Development Finance Company, the French Development Agency, the European Investment Bank and the Commercial Bank of Africa.
It also collaborates with several international organisations with similar objectives, such as the International Union of Housing Finance (IUHF), the Centre for Affordable Housing Finance in Africa (CAHF) and the UN Habitat for A Better Urban Future (UN-Habitat).
In respect of the development of affordable housing in Zimbabwe, the institution is in the process of developing a plan with the Government for the development of at least 3 000 units.
This was revealed this week by National Housing and Social Amenities Minister Daniel Garwe.
“We are currently in discussions with Shelter Afrique to come up with a huge housing development project where we are targeting a minimum of 3 000 affordable housing units,” he said.
“We haven’t fine-tuned exactly where and how we are going to do it, but the commitment we have given is that Government is going to be providing land, while Shelter Arique will be providing financial instruments.
“It will involve the participation of our local banks and local developers,” said Minister Garwe.