Shelter Afrique is one of the companies taking the lead in Africa to provide affordable houses to the growing population. It is a financier, funding affordable homes across Africa. The green financing aim is to provide cheap options to fund developments which directly affect the environment such as construction. The company intends to reach out to companies willing to partner with them to access the funding for affordable housing in Africa, including Kenya.
In a report by the climate bond initiative last year, the green bond fund distribution was predicted to rise to US$250 billion from US$170.9Billion in the previous year, 2018. Also, the International Finance Corporation made a prediction of cumulative climate investment opportunity of US$29.4 trillion in 6 major sectors in emerging cities by 2030 to accommodate the growing population across the cities. The tremendous portion of the opportunity is in green buildings worth US$24.7 trillion, covering new constructions and retrofits in the cities.
In Africa, Shelter Afrique commenced its first issuance in South Africa. This was back in 2014, as the county benefited from a US$101.3 million fund and took another green bond in the year 2017, worth US$67.5 million. Nigeria was not left behind as it took its first green bond in the year 2017, worth US$30 million. More countries in Africa are planning to make a debut in the shelter Afrique green bond as Egypt is set to take its first bond this year.
In Kenya, the first green bond was issued last year by a Nairobi based property developer, Acon Holdings. The purpose of this fund was to aid in the construction of a friendly environment for students worth Ksh 4.3 billion.
Shelter Afrique CEO Andrew Chimpondah told the press that South Africa, Nigeria and Kenya already have well-established markets hence the approval of the funding. He also added that Kenya can support not only its market but also that of the whole of Eastern Africa. However, there is a need to strengthen these markets.
Major markets recognized for urban climate-smart investment by the company are:
- public transport infrastructure- US$1 trillion
- climate-smart water- US$1 trillion
- electric vehicles- US$1.6 trillion
- municipal solid waste management- US$0.2 trillion
- renewable energy-US$0.8 trillion
A report of research done by Shelter Afrique Centre of Excellence (CoE) shows that African countries are urbanizing at a very fast rate, making the continent’s housing crisis worse. The report also indicated that Africa will need more than US$ 1.4 trillion in funding to address this issue. That is why the Shelter Afrique Green Bond will be of help to the African countries.