A group of local and international players in the housing sector is set to spend $200 million on the construction of affordable housing units in Kinyinya, a project that will contribute to Rwanda's efforts to address the shortage of accommodation in Kigali.
China's Broad Homes Industrial International, Development Bank of Rwanda, Rwanda Social Security Board, BSMART Technology - a research and design firm - and the International Finance Cooperation (IFC) yesterday signed a Memorandum of Understanding to develop residential and commercial units.
The project is expected to benefit nearly 50,000 people in terms of employment and business opportunities.
The deal is part of the World Bank Group's move to encourage commercial investment in the housing sector through its recently created International Development Association's (IDA).
Karin Finkelston, IFC's Vice President for Partnerships, Communication and Outreach, said that, among other things, they intend to reduce risk and increase investment in the sector.
The deal will also offer alternative financing to homeowners who often rely on expensive commercial bank loans to construct houses, she said.
In the long term, she said, they hope the development can spur the emergence of a viable housing industry in the country.
Bo Huang, the Vice President of Broad Homes, said the deal will address challenges that have previously hindered their entrance into markets such as Rwanda as it de-risks the sector and avails capital that would have otherwise been expensive.
He said that with limited financial resources, they have previously not been able to make the most of opportunities such as the housing deficit in Rwanda.
The firm seeks to introduce a cheaper technology in housing, precast concrete manufacturing and construction.
Broad Homes is one of the largest private players in the Chinese Precast concrete construction sector.
Jonathan Gatera, the Director General of Rwanda Social Security Board, said that the MOU is a culmination of one year of negotiations with IFC, which seeks to diversify the role of the private sector in the housing sector.
Meanwhile, Development Bank of Rwanda began receiving applications of interest in the Ndera Affordable Housing Project being implemented in partnership with Moroccan real estate developer, Palmeraie Development Group.
The project will develop 1750 housing units in the first phase.
The investment is against an estimated demand of 31,000 housing units annually, to ensure city dwellers have access to quality shelter.
This is RSSB's attempt to invest in affordable housing as the previous housing project, Vision City, is out of reach for most Rwandans with each unit going for between Rwf105m to Rwf180m.