UK Climate Investment (UKCI) has revealed plans to invest Sh3.94 billion to finance the construction of cheap homes, largely boosting the government’s affordable housing pillar under the Big Four agenda.
UKCI is a joint venture between the Green Investment Group and the UK Government’s Department for Business, Energy and Industrial Strategy.
The prospective commitment is expected to fund the construction of 10,000 energy and water-efficient houses in the country.
The funds will be delivered through a locally managed strategy targeting Sh8.08 billion-Sh25.24 billion worth of investor commitments.
“As Kenya’s urban population grows, the need for new affordable housing has never been greater,” UKCI managing director Richard Abel said.
According to World Bank Kenya has a housing deficit of 2 million, which has been growing at a rate of about 200,000 units per year.
Abel said the capital injection will help address this challenge adding that the opportunity would also showcase how more sustainable building designs can help tackle the effects of climate change.
British High Commissioner to Kenya Jane Marriott OBE said the UK was proud to partner with Kenya to tackle the pressing challenges of climate change and affordable housing.
“UK Climate Investment’s £30 million anchor investment will help build affordable, climate-friendly homes and promote green building standards in Kenya,” she said.
Last week, the government received the first 228 complete housing units out of the 1,370 under construction at the Park Road Project in Nairobi.
The national affordable housing project targets to build at least 500,000 new homes over the next two years.
During the handover ceremony, Housing and Urban Development PS Charles Hinga was confident the government would deliver the 500,000 affordable housing units by 2022.
Hinga said there are over 500,000 homes in different stages of development adding that contractors have been cleared to start building 98,000 units this quarter.
He announced the scrapping of VAT on building materials among new incentives for affordable housing.
The government will also reduce custom tariffs for bulk affordable housing materials and remove stamp duty for first-time house owners.