Centum Real Estate is set to receive a loan facility of $20 million (equivalent to Sh2.9 billion) from The World Bank, aimed at supporting the construction of affordable housing units within the Two Rivers development.
This significant financial assistance, provided through the International Finance Corporation (IFC), will be directed towards the prime 104-acre mixed-use urban node located in Kenya’s Diplomatic Blue Zone in northern Nairobi.
The overall estimated cost of the project stands at $91 million (Sh13.2 billion), with IFC contributing $20 million through the loan facility. The primary objective of this financial injection, according to IFC, is to bridge the evident and growing gap in Kenya’s affordable housing market.
This funding announcement follows the recent designation of the Two Rivers land as a private Special Economic Zone (SEZ), adding to the development’s strategic significance.
“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,” revealed IFC in disclosures accessed by The Star.
IFC’s comprehensive assessment of the project’s environmental and social aspects was carried out in May 2023. The long-term debt funding provided by IFC addresses a gap that is typically considered too risky by purely commercial investors in the market.
This backing from IFC is expected to serve as a vote of confidence in Centum and is likely to attract more investors to the affordable housing sector in Kenya. Additionally, IFC will offer expertise in innovation and capacity building.
Centum Real Estate’s focus extends to three key real estate segments: housing, development rights, and property management. It currently operates as the parent company for four wholly owned subsidiaries, namely Vipingo Development Plc, Centum Development Kenya Ltd, Uhuru Heights Ltd, and Pearl Marina Estates Ltd in Uganda.
IFC has committed to financing all three phases of the Mzizi Home project. The project is currently in its first construction phase, slated for completion in July 2024 and is under the management of a third-party contractor. Upon reaching an 80 percent unit sales threshold, Centum will transition to a third-party property management firm for initial operations, leading to the formation of a property management company by the homeowners.
Centum Real Estate’s strategic housing investment plan outlines the construction of 9,908 housing units within Two Rivers, with the overarching goal of addressing Kenya’s growing need for affordable housing solutions.
