This article is sponsored by ShelterAfrique
Mr. Diab Karrar, chief operations officer at BADEA, made the announcement to the African ministers of finance, housing, urban planning and development at the 43rd Annual General meeting of ShafDB4 in Kigali, Rwanda.
The initiative will support Shelter Afrique to increase its financing capacity by providing loans to eligible member states to cover their contributions to the required capital increase.
According to Mr. Karrar, the initiative will positively contribute to the construction of 3,883 new affordable housing units by 2027, including the delivery of 1,052 green housing units, the housing of 19,425 households, the creation of 21,357 new jobs by 2027 and the financing of $60million from the project fund PPF.
Eligible countries will be able to access approximately $200 million.
“This initiative presents a strategic opportunity for BADEA to harmonise its efforts with Development Finance Institutions (DFIs) and leverage a multiplier effect, maximizing the developmental impact of each invested dollar.”
Following the announcement, Mr. Thierno-Habib Hann, ShafDB managing Director, in his action call to the 44 ShafDB member states appealed to countries to embrace the unique funding opportunity by BADEA that will significantly enhance their collective ability to deliver on ensuring affordable housing for Africa which is ShafDB’s main mandate.
“This initiative presents a golden opportunity for us to raise cheaper funding, thereby strengthening our financial base and enabling us to scale our efforts in addressing the critical housing needs across our member states,” said Mr. Hann.
“To leverage this opportunity, we need your immediate signal of interest in participating in this funding program.”
Additionally, he said countries’ commitment will not only facilitate the timely payment of capital arrears but will also demonstrate their collective resolve to support ShafDB’s mission of providing affordable housing solutions across Africa.
He underscored the importance of the initiative, saying ShafDB believes it is important for countries to be part of the BADEA funding program as it includes an enhanced financial strength that will address countries’ capital arrears, improve their balance sheet and financial stability which is essential for accessing additional funding at favorable terms.
“At ShafDB, we remain committed to financing affordable housing and urban infrastructure projects across Africa, contributing to a resilient and prosperous future,” noted Mr. Hann.
He said that the funding initiative will enable countries to access cheaper funding, meaning that they can invest in housing projects, thereby increasing our impact and reaching more families in need of affordable housing.
He noted that the initiative will strengthen partnerships showing a unified commitment with BADEA and other international financial institutions opening doors for future collaborations.
“For ShafDB, this initiative will fulfill our mandate of timely and adequate funding to meet our development goals and of providing sustainable housing solutions. We urge you to act swiftly and signal your interest in participating in this funding program through signing the letter of intent,” he said.
“Your proactive response will be a testament to our shared commitment to addressing the housing deficit in Africa and ensuring that every African has access to decent and affordable housing.”
Requirements for countries to qualify for the funding:
Highlighting the requirements for countries to qualify for the funding under the program, Mr. Karrar said that a formal financing request from ShafDB to BADEA outlining the purpose of the operation and the total amount of funds required is mandatory.
Separately, he announced an official request from each eligible and interested member state to BADEA stating their desired total loan amount.
Additionally, a comprehensive concept notes details, among other things, Shelter Afrique’s current total capital and capital structure, including share type, values, and rights, the breakdown of current capital by countries, the rationale and objective of capital increase operation, and the anticipated development impact of the capital increase is required.
Preparation and implementation procedures.
A framework agreement will be signed between BADEA and ShafDB.
BADEA will have separate bilateral agreements with the eligible member states
The financing conditions and agreements with the member states will be discussed on a bilateral basis to take into account the different requirements needed for each country.
The framework agreement and bilateral agreement will include the conditions, allowing BADEA to track the implementation of the operation and determining the results of the intervention. These will cover aspects such as providing BADEA with periodic reports on the implementation of the program, the financed programs of the member states, development results attributed to the capital increase initiative.