Centum Real Estate will receive a $20 million (Sh2.9 billion) loan facility from The World Bank to support construction of affordable housing units at Two Rivers.
The funds to be disbursed through International Finance Cooperation will finance the prime 104-acre mixed use urban node located within Kenya’s Diplomatic Blue Zone in northern Nairobi.
The total estimated project cost is $91 million (Sh13.2 billion), of which IFC will be financing US$20 million via the Loan.
According to IFC, the injection of the funds into Kenya's largest listed investment firm, will address the obvious and increasing affordable housing market gap in Kenya.
The funding comes just two months after the gazettement of the Two Rivers land as a private Special Economic Zone (SEZ).
“The proposed IFC investment is an up to $20 million A Loan to support Centum Real Estate Limited, a wholly owned subsidiary of Centum Investment Company, to finance its development of 1,940 affordable housing units in Two Rivers Development,” says IFC in disclosures seen by The Star.
IFC’s Environmental and Social appraisal of the project was conducted in May 2023.
IFC will provide long-term debt funding, which would otherwise not be available in the market from strictly commercial investors as the sector is considered highly risky.
According to the disclosure this will offer a “stamp of approval” to Centum and is expected to attract more investors to the affordable housing space in Kenya.
IFC will also offer knowledge innovation and capacity building.
Centum Real Estate focuses on three real estate business nodes the housing, development rights, and property management.
It currently serves as the holding company for four wholly owned subsidiaries: Vipingo Development Plc, Centum Development Kenya Ltd and Uhuru Heights Ltd and Pearl Marina Estates Ltd domiciled in Uganda.
IFC, says it will be financing all three phases of Mzizi Home project.
The Project is currently in its first phase of construction that is due to be completed in July 2024 and is currently managed by a third-party contractor.
Once completed units are 80 percent sold, Centum will handover to a third-party property management company who will manage the initial operations phase prior to formation of a property management company by the homeowners.
Centum Real Estate’s strategic housing investment is planning to build 9,908 housing units within Two Rivers in the long-term with the aim of addressing the obvious and increasing affordable housing market gap in Kenya.
