Nigeria unlocks $125m private capital for 100,000-home housing PPP
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The Infrastructure Concession Regulatory Commission says concessionary loans, mortgage support and risk-sharing have drawn about $125 million of private investment into the Renewed Hope housing scheme, cutting its effective cost by roughly 30 per cent.
Nigeria has unlocked about $125 million in private-sector investment for affordable housing and cut the effective cost of its Renewed Hope Housing project by about 30 per cent, using concessionary financing, mortgage support and risk-sharing arrangements, the Infrastructure Concession Regulatory Commission (ICRC) has said.
ICRC Director General and Chief Executive Jobson Ewalefoh presented the financing structure at a continental public-private partnership forum in Addis Ababa, Ethiopia, where it was designed to deliver 100,000 housing units across selected Nigerian cities without direct government financing of construction. The forum was jointly organised by the United Nations Economic Commission for Africa, the African Development Bank and the African Legal Support Facility under the theme "Making Social Sector PPPs Work: From Policy Ambition to Effective Service Delivery".
The initiative targets one of the sector’s biggest constraints, the cost of capital, with commercial lending rates above 23 per cent making it difficult for developers to finance projects and for buyers to afford completed units.
Under the arrangement, government is deploying targeted financial incentives, guaranteed demand and supporting infrastructure to reduce investment risk rather than paying for construction. The private partner provides the land, designs the scheme, arranges financing and builds. "The beauty of this PPP structure is that it is not the conventional PPP. In this case, the private party owns the land, has the design, is financing it and is doing the construction," Ewalefoh said.
Government commitments include identifying middle-income federal civil servants as off-takers, providing access roads to semi-urban project sites and facilitating concessionary funding through specialised housing finance institutions. About $19 million of single-digit interest-rate funding was unlocked through the Federal Mortgage Bank of Nigeria, another $20 million in concessionary loans came through the Family Homes Fund, and about $112 million from the MOFI Real Estate Investment Fund is supporting lower mortgage rates for buyers.
Sale prices were negotiated with the developer to improve affordability, while purchases were restricted to one unit per buyer to discourage speculative acquisition. The combined measures cut the project’s effective cost by about 30 per cent, improving commercial viability while limiting the government’s direct financing burden, according to the commission.