A Namibia affordable housing scheme shows the way for green projects in the developed world – and provides reasonably priced homes to workers there and in Botswana.
Liana Mbako works in Windhoek. In August, he moved house, taking one of 240 units in a new energy efficient building in Okahandja, north of Namibia’s capital. The new apartment is closer to shops and services. It also cut his electricity bill to one fifth of the cost in his old place and he’s paying one tenth of the price for water.
“Our financial situation has changed and our life too,” says Mbako. “Before we had no intimacy. Here the apartments are eco-friendly and nobody will infringe upon your privacy. Here, we are happy and relaxed”.
The housing scheme in Okahandja is the first in a series of affordable and green housing projects across Namibia and Botswana, where a housing fund manager based in South Africa decided to invest.
The International Housing Solutions II SSA Fund is backed by the European Investment Bank as a co-investor alongside KfW, the World Bank’s International Finance Corporation and private investors in Namibia and South Africa. With $80 million in capital, the Fund’s schemes are expected to have an impact on:
development by increasing housing
society by offering good-quality housing to middle-income people
the environment by saving 20% of water and electricity use.
“We wanted to be successful on the green side without increasing price”, says Cathal Conaty, managing director of the fund manager. “We are aiming at the greatest level of affordability that we can achieve and commercially viable affordable housing.”
Housing projects go one step further in Africa
The European Investment Bank’s contribution of $20 million comes from the ACP Investment Facility.
Gunter Fischer, the European Investment Bank loan officer who works on this project, explains that the EU bank had never before financed a housing investment outside Europe through a fund. It signed this deal in December 2017 because of the sustainability of the project and its impact.
“I am very satisfied to see tangible results and a pipeline of further projects,” says Fischer. “I am impressed by the professional approach of the Fund. This is a one-stop shop. The investment is efficient and there is quick information exchange, which makes the whole concept more professional.”
So why is the project important?
The population of Sub-Saharan Africa is expected to rise by one billion people in the next 30 years. In Namibia in particular, socioeconomic factors in the post-apartheid era create a market need for affordable housing. As for green housing, this is simply non-existent in the affordable market due to its perceived high-costs and unclear benefits.
Yet, in a country with little water, tenants will spread the word about their lower water bills and boost interest in a market for green housing.
Affordable housing targets people who work in jobs such as teaching, nursing or government, as opposed to social housing, which targets people with very few resources and no access to formal housing. Social housing is not part of this project, as it requires a government subsidy currently unavailable in Namibia.
Namibia affordable housing builds the future
The schemes consist mainly of so-called turnkey deals. The fund manager partners with local developers who have identified a plot of land. They agree on the design and the IFC energy efficiency standard. The fund manager and the developer put capital into the scheme upon completion, including loans from local banks. The units constructed will mostly be available for rent, as well as for sale through the developers. But the fund manager manages the housing.
So far, the Fund is 66% committed and 1,200 units are under construction, with 2,300 more on the way. The Botswana units are affordable housing, whereas in Namibia they are affordable and also green. These are typically 2-bed 1-bath apartments, laid in two to three-storey blocks of 9 to 12 units per block. One housing project has been completed in each of the two countries.
Both for the European Investment Bank and the Fund, mobilising local capital and involving local developers was important.
“We get a lot of satisfaction out of this work and we are very happy with the green element”, says the Fund’s Conaty. “Our ultimate goal is to offer a good level of quality of life to a group of people who have been underserved”.