The Board of Directors of the African Development Bank (AfDB) has approved on 6 September 2012 a USD 7 million equity investment in the Pan African Housing Fund (PAHF), a private equity fund targeting the lower-middle and middle-middle class residential housing market in Africa. This contribution will allow PAHF to help grow the capacity of local developers to deliver housing development projects that address the severe shortage of housing and corresponding infrastructure required to keep pace with Africa's fast-paced urbanization.

According to UN Habitat data, Africa currently includes 17 of the world's 100 fastest growing cities. If the current trend is sustained, it is projected that by 2050 more than half of Africa's population will be urban, and African cities will host an expected 1.2 billion people.

Urbanization in most African countries has been characterized by unplanned developments and poor access to basic services, with increasing demand for housing and ancillary infrastructure remaining unmet by available supply. The PAHF seeks to address the existing deficit and meet the increasing investment needs for housing in sub-Saharan Africa.

PAHF is sponsored by Shelter Afrique, a pan-African housing finance and development institution established by African governments, the AfDB, Africa-Reinsurance Co. and Commonwealth Development Corporation Group (CDC), to address the need for sustainable housing delivery systems and related infrastructure in Africa. Shelter-Afrique has launched PAHF to meet the increasing need for equity financing in the sector.

PAHF will be managed by the Phatisa Group, a private equity fund management, corporate finance and advisory company.PAHF's investments will have a meaningful impact in boosting the capacity of local private sector developers to deliver commercial and residential infrastructure, while enabling local governments to address community urban planning challenges.

Tim Turner, AfDB's Private Sector and Microfinance Director, said: "By providing risk capital and access to an extensive network of developer and investment professionals, the PAHF's investments will contribute to improve living conditions for the growing urban population by boosting the availability of affordable housing for lower-middle to middle-middle class households. This investment is expected to create a total of 5,100 additional single- and multi-family housing units and rentals.