Euro­pean In­vest­ment Bank pro­vides R2bn in sup­port for low-in­come hous­ing

Weekend Argus (Saturday Edition) - - PROPERTY -

THE EURO­PEAN In­vest­ment Bank (EIB), Europe’s long-term lend­ing in­sti­tu­tion, has agreed to pro­vide a fur­ther € 150 mil­lion (R2 bil­lion) for in­vest­ment in af­ford­able and so­cial hous­ing in South Africa.

The new pro­gramme will be man­aged in South Africa by four lo­cal part­ners – two pub­lic devel­op­ment fi­nance in­sti­tu­tions and two com­mer­cial banks – which have al­ready iden­ti­fied devel­op­ment projects that would de­liver about 23 800 new hous­ing units.

The first of the four loan agree­ments was signed in Joburg re­cently by Pim van Ballekom, Euro­pean In­vest­ment Bank vice- pres­i­dent re­spon­si­ble for sub- Sa­ha­ran Africa and South Africa, and rep­re­sen­ta­tives of Ned­bank.

Fund­ing pro­vided by the EIB to the four South African in­sti­tu­tions will en­able pub­lic and pri­vate de­vel­op­ers to in­crease en­gage­ment in af­ford­able and so­cial hous­ing.

“Sup­port for in­creased pro­vi­sion of af­ford­able and so­cial hous­ing is es­sen­tial for fur­ther eco­nomic and so­cial in­te­gra­tion in South Africa.

“The EIB’s sec­ond pro­gramme re­flects the goals of the coun­try’s Na­tional Devel­op­ment Plan 2030. Build­ing on the suc­cess of the pre­vi­ous en­gage­ment, it uses the same model of fruit­ful co-op­er­a­tion with lo­cal pub­lic and com­mer­cial banks to help stim­u­late fi­nanc­ing for build­ing new homes and up­grad­ing ex­ist­ing ones across t h e c o u n t r y, ” s a i d Va n Ballekom.

The EIB’s en­gage­ment sup­ports the 2012 Fi­nan­cial Sec­tor C o d e c o mmit t i n g S o u t h African banks to pro­mote a trans­formed, vi­brant and glob­ally com­pet­i­tive fi­nan­cial sec­tor that re­flects South Africa’s de­mo­graph­ics and to di­rect in­vest­ment in tar­geted sec­tors of the econ­omy such as so­cial and af­ford­able hous­ing.

“The cri­te­ria for EIB’s fund­ing in­clude a tan­gi­ble demon­stra­tion by the bank of its ac­tive par­tic­i­pa­tion in the pro­vi­sion of hous­ing in South Africa.

“In keep­ing with its rank­ing of the JSE’s most em­pow­ered com­pany un­der the DTI codes, Ned­bank has demon­strated its com­mit­ment to trans­for­ma­tion by its af­ford­able hous­ing devel­op­ment unit in Ned­bank Cor­po­rate,” said Manie An­nan­dale, head of af­ford­able hous­ing devel­op­ment fi­nance.

“In ad­di­tion, in 2013 the af­ford­able hous­ing devel­op­ment fi­nance unit de­vel­oped a so­cial hous­ing devel­op­ment fund­ing prod­uct for South African So­cial Hous­ing Reg­u­lat ory Author­ity- ac­cred­ited so­cial hous­ing in­sti­tu­tions to ac­cel­er­ate much-needed so­cial hous­ing de­liv­ery for the R1 500 t o R7 500- a- month i ncome groups. This ini­tia­tive is the first of its kind among the top four com­mer­cial banks in South Africa.”

The EIB’s new ini­tia­tive fol­lows a sim­i­lar pro­gramme launched in 2008, which has sup­ported the de­liv­ery of about 42 000 af­ford­able and so­cial hous­ing units. In­di­vid­ual hous­ing schemes funded un­der the ini­tia­tive will be im­ple­mented across the coun­try by de­vel­op­ers and hous­ing providers.

Un­der the ini­tia­tive, the EIB will con­trib­ute up to half of a hous­ing scheme’s cost. Se­lected hous­ing schemes are ex­pected to be im­ple­mented by 2016 and around 6 500 con­struc­tion jobs will be cre­ated.

The fund­ing will also sup­port re­new­able en­ergy com­po­nents such as so­lar gey­sers, which will be part of new con­struc­tions.

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