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