The National Social Security Fund (NSSF) targets a debt facility of up to Sh1.6billion to finance the construction of a mega affordable housing complex in Kisumu’s Milimani area.
Regulatory disclosures showed that the debt will form part of Sh1.95billion financing for the housing project that will comprise 162 units.
“The project will be fully funded by funds from NSSF at an estimated cost of Sh1,953,426,539.00.
The project will be debt-financed by a debt facility up to Sh1.6 billion. The financing plan results in total loan exposure of 65percent compared against the project cost, which is within most lending institutions' lending requirements, which caps Loan to Value (LTV) ratio to 70 percent,” the fund said in a disclosure.
LTV represents the proportion of an asset that is being debt-financed. LTV represents the proportion of an asset’s value that a lender is willing to provide debt financing against. It’s usually expressed as a percentage.
The NSSF said that its proposed Kisumu housing project will consist of 108 units of two-bedroom apartments with domestic servant quarters (DSQs) and 54 units of three-bedroom apartments with DSQs.
“The project has mixed-use character as observed from the mix of single dwelling and apartment residential developments, religious facilities, hospitals (Nitingale Medical Center- Milimani), hotels (Kalongo – longo restaurant), and schools Xaverian Primary School) in the immediate neighbourhood,” NSSF said.
“The site currently has four masionates occupied by staff of NSSF, which will be demolished to pave way for the modern affordable houses and make good use of the available land,” it added.
The project marks the second mega project that NSSF has in its pipeline for implementation.
The fund recently revealed plans for a multi-billion-shilling mixed-use complex on a highly sought-after, controversial parcel of land it owns in the Nairobi central business district.
The project is planned for construction in the State corporation’s 3.85-acre plot at the corner of Uhuru Highway and Kenyatta Avenue, which has conspicuously remained vacant for decades amid political intrigues and twists and turns that have over the years sucked in various State agencies and private investors, including billionaire India businessman Mukesh Ambani.
NSSF said the Nairobi project would be implemented on an Engineering, Procurement, Construction, and Finance (EPC+F) model, where contractors handle a project from start to finish and arrange financing.
In the EPC model, contractors handle the project in its entirety, from the initial design and engineering plans to construction and completion, and also arrange financing for the project through tie-ups with financing institutions.
NSSF, which held Sh400 billion in investments as of August 30, 2024, said the planned Nairobi project is part of a strategy to unlock value from idle assets it owns.
