UK Climate Investments (“UKCI”) has announced that it intends to invest up to £30 million ($US39 million) in order to finance the construction of affordable green housing in Kenya.
The prospective commitment, which will be delivered through a locally managed strategy targeting $US80-250 million of investor commitments, is intended to sponsor the construction and development of approximately 10,000 energy and water efficient homes in Kenya. By demonstrating the viability of environmentally sustainable building design, UKCI’s commitment and eventual investment will seek to embed green standards in the Kenyan market. The commitment will also support the creation of a new green asset class for local investors, mobilising Kenyan institutional capital to invest further in the sector.
"As Kenya’s urban population grows, the need for new affordable housing has never been greater. The commitment we have announced today represents an exciting opportunity to help address this challenge – financing the construction of new affordable homes whilst showcasing how more sustainable building design can help tackle the effects of climate change."
Managing Director of UKCI
"The UK is 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."
Jane Marriott OBE
British High Commissioner to Kenya
Africa is increasingly vulnerable to the effects of climate change, despite only being responsible for the production of two per cent of global energy-related carbon dioxide emissions. With rising average temperatures and more unpredictable rainfall expected over the coming decades, it is critical that building design in the region evolves to become more resilient. When compared with local building standards, the IFC EDGE certified homes financed by UKCI’s commitment will use at least 20 per cent less electricity and water than conventional Kenyan homes. The homes will also be built using materials with 20 per cent less embodied energy.
Access to affordable housing remains a significant challenge in Kenya, where approximately 36 per cent of the population live below the international poverty line. UKCI’s commitment will help address a critical shortage of affordable housing in Nairobi and contribute to the country’s goal of building 500,000 new affordable homes by 2022.
Last year, UKCI committed more than £40 million to support the build-out of green infrastructure across sub-Saharan Africa. In January, UKCI became a cornerstone investor in Revego Africa Energy Limited, committing £28 million to the dedicated African renewable energy yieldco. In August, UKCI announced a £14 million agreement with H1 Holdings to support the development of 254 MW of renewables projects across South Africa.
UKCI is a joint venture between the Green Investment Group and the UK Government’s Department for Business, Energy and Industrial Strategy. UKCI forms part of the UK aid funded International Climate Finance. UKCI is managed by Macquarie Infrastructure and Real Assets, the world’s largest infrastructure manager.