Shelter Afrique Development Bank (ShafDB), a Pan-African institution dedicated to financing and promoting housing, urban, and related infrastructure development, has recently introduced its innovative Affordable Housing Credit Guarantee Program in Nigeria. This program has received full approval from ShafDB’s Board of Directors.
To kickstart this groundbreaking initiative, ShafDB has initiated the first pilot transaction, providing a three billion Naira (₦3 Billion) debt financing guarantee to Modern Shelter Systems and Services Limited. This guarantee is part of a comprehensive affordable housing program aimed at developing 370 affordable housing units in Nasarawa Technology Village. These units will adhere to the green building standards set by the International Finance Corporation’s (IFC) EDGE program.
This initiative is a significant component of ShafDB’s expansive ₦200 billion Affordable Housing Credit Program in Nigeria. Last year, ShafDB successfully issued a debut ₦46 billion bond in Nigeria’s capital market, which was oversubscribed by 60.7%, demonstrating strong investor interest. This bond issuance allows ShafDB to secure local currency funding and mitigate foreign currency risks. Additionally, ShafDB’s investment in the Housing Solution Fund (HSF) further contributes to de-risking the housing ecosystem and value-chain.
The partnership between Shelter Afrique and InfraCredit, a triple A (AAA)-rated specialized infrastructure credit guarantee institution, under the financing guarantee structure, is a significant step towards addressing Nigeria’s housing deficit. The overall project aims to develop up to 1,200 EDGE-certified housing units in Nasarawa State, making a substantial impact on the housing situation in the country.
Nigeria, a country projected to have a population of 400 million by 2050, is currently facing a housing deficit of around 28 million units. This requires a significant investment to address the issue. The Housing Solution Fund, in collaboration with an offtake agreement, aims to provide affordable and long-term home loans to eligible homebuyers. This initiative demonstrates ShafDB’s unwavering commitment to promoting sustainable and resilient housing solutions, which will have a positive impact on the entire African continent.
Thierno-Habib Hann, the Managing Director of Shelter Afrique Development Bank, highlighted the institution’s dedication to expanding its interventions in Nigeria through an integrated model. This approach aims to mitigate off-take risks and offer beneficiaries more accessible, affordable, and longer-tenured financing options. Ultimately, this will contribute to sustainable development and prosperity.
Chinua Azubike, the Chief Executive Officer of InfraCredit, expressed excitement about the successful completion of this transaction and the significance of the project in the housing sector. The Nasarawa Technology Village project serves as a successful example of how public-private partnerships can unlock climate financing for sustainable development. InfraCredit is thrilled to be able to replicate and scale the impact of this project, further contributing to the housing sector.