NAIROBI, Jan. 30 (Xinhua) -- Kenya plans to partner with the Multilateral Investment Guarantee Agency (MIGA), which is a member of World Bank Group, to lure investors into the affordable housing sector, a government official said on Wednesday.
Charles Hinga Mwaura, principal secretary of the Ministry of Transport, Infrastructure Housing and Urban Development, told at a trade forum in Nairobi that Kenya requires 2.6 trillion Kenyan shillings (about 25.7 billion U.S. dollars) from both public and private sources to construct one million social housing units by end of 2022.
"We are going to partner with MIGA to provide insurance so that for foreign denominated investors are comfortable in putting their funds into Kenya's housing market," said Mwaura.
He noted that the MIGA facility is likely to help de-risk investments that will be put into real estate sector.
"It will also ensure that foreign investors are compensated for any equity and loans in case of political risk or changes in government housing policy that will affect their portfolio," he added.
Mwaura said that the government is not keen to borrow funds and burden taxpayers but will partner with the private sector to construct the social houses in order to maintain the country's macro-economic stability.
He added that under President Uhuru Kenyatta's big four agenda on affordable housing, approximately 2.4 million salaried employees will be subjected to a mandatory contribution of 1.5 percent of their monthly incomes which will be channeled to the housing levy.
Mwaura observed that in order to create demand for the affordable houses, the fund will be used to purchase the houses constructed by the private sector.