EIB lends EUR 500 million to Caisse des Dépôts and its agent the SNI Group to finance their affordable rental housing construction programme
- Release date: 03 November 2015
- Reference: 2015-250-EN
On Tuesday 3 November 2015, at the Hôtel de Pomereu, in the presence of Housing and Regional Equality Minister, Sylvia Pinel, Ambroise Fayolle, Vice-President of the European Investment Bank (EIB), Pierre-René Lemas, CEO of the Caisse des Dépôts Group, and André Yché, Chairman of the Board of Directors of the SNI Group, signed a EUR 500 million loan aimed at financing a construction recovery programme. Coming on top of the EUR 900 million increase in the SNI Group’s capital by Caisse des Dépôts and other funding, this loan will enable the SNI Group to build 12 000 affordable rental housing units in areas where there is a shortage by 2019.
A model of institutional cooperation in support of public sector recovery
On 13 June 2013, the Caisse des Dépôts Group and the EIB signed, in the presence of the Ministers of Finance and European Affairs, a bilateral cooperation agreement aimed at supporting investment in the heart of French regions and boosting growth and employment. The idea was to foster the joint long-term financing of projects in key areas of regional development: sustainable transport, health, access to high-speed broadband, higher education, the energy efficiency of public buildings. At the end of 2014, the two institutions decided to extend this partnership to the government’s priority housing sector.
Fully in line with this partnership, this support for the SNI Group’s affordable housing construction programme represents a model of cooperation between public institutions (French and EU) and demonstrates a strong commitment to fostering public sector recovery. This loan will enable the SNI Group to build 12 000 new housing units by 2019.
Meeting the latest energy performance standards, these housing units will be subject to the affordable rental housing provisions of the Order of 20 February 2014. Located in areas where there is a housing shortage and with rents 15 to 20% below the market, this new rental offer will provide a sustainable response to the inability of the middle classes to gain access to housing on the open market.
A EUR 500 million loan on favourable terms
The EIB is granting a EUR 500 million credit line that can be drawn down over 5 years to fund loans of up to 25 years. The rate (fixed or indexed to 6 month Euribor) will be set at each drawdown. The SNI Group will therefore benefit from competitive pricing for its debt.
Affordable rental housing, a key element of the construction recovery plan
As France’s biggest housing lender, the SNI Group is a driver of the development of affordable rental housing, the missing link in the sector between social housing, private rented accommodation and property ownership.
On top of its own programme to build 12 000 new housing units, in 2014 the Group launched in conjunction with the public authorities the Affordable Rental Housing Fund, a pilot property investment fund designed to attract institutional investors back to the residential property market. This fund plans to acquire 10 000 affordable rental housing units over five years.
In 2015, the SNI Group and its subsidiary Ampère Management were also selected to manage a new investment fund set up by the government and endowed with capital of EUR 1 billion. This fund is expected to acquire 13 000 affordable rental housing units.
In total, the SNI Group will build 35 000 new affordable rental housing units over the next five years. As a key product in the recovery of the construction sector, affordable rental housing will make it possible to step up production, safeguard jobs and ensure the financial balance of housebuilding programmes.