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Shelter Afrique owners inject Sh2.5bn capital in six months

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Former Shelter Afrique CEO Andrew Chimphondah. PHOTO | POOL

The Democratic Republic of Congo (DRC) has ramped up its stake in pan-African housing financier Shelter Afrique, joining nine other member countries that have acquired extra shareholding with additional capital this year.

DRC has acquired an additional 0.94 percent stake with a $2.5 million (Sh275 million) capital injection, raising its shareholding to 1.68 percent from 0.74 percent.

“The total additional capital we have received from member States within the last six months of 2021 now stands at $22.7 million (Sh2.5 billion),” said Shelter Afrique chief executive Andrew Chimphondah.

“This much-needed capital injection which will go a long way to assisting strengthening the capital structure of the company in preparation for its fundraising efforts to raise additional debt capital required to support the pipeline which now stands at $1 billion (Sh110 billion).”

Last week, Shelter Afrique announced that it had completed the repayment of the balance of Sh20.5 billion ($186 million) owed to eight lenders three years ahead of schedule.

The repayment, it said, paved the way for the lender to roll out its bond issuance plan, which was first announced earlier this year.

It will be seeking Sh55.1 billion ($500 million) from East Africa and a similar amount from Nigeria, with the remaining $250 million (Sh27.6 billion) coming from its francophone markets.

“Plans are currently underway to register bonds on the Nigerian Stock Exchange and the Nairobi Securities Exchange,” the lender said.

Goma projects

The Nairobi-based Shelter Afrique, last year, returned a net profit of Sh199.6 million ($1.85 million) after six years of losses amid high finance costs, which negatively affected its ability to raise new capital and fund new projects.

The lender is eying low-cost housing projects in the eastern DRC city of Goma, home to over one million inhabitants, which was hit by Mt Nyiragongo volcanic eruption in May, displacing thousands of people.

“We are grateful to the government of the Democratic Republic of Congo for making this strong commitment to Shelter Afrique.

“We would like to play a part in providing low-cost large-scale housing projects in Goma and other parts of DRC given the acute housing shortage estimated at 4 million housing units from the Shelter Afrique Centre of Excellence Research Desk,” said Mr Chimphondah.

The company, which provides long-term credit lines for primary mortgage lenders, housing micro-finance institutions and re-financiers, has approved financing in DRC worth Sh1.5 billion ($13.5 million).

Among its projects in the vast central African country are Devimco’s 7-floor office building, La Tradition, Le Concorde, L’Ambassadeur and Azda, and a 10-storey building in Kinshasa developed by ELOLO SPRL.

Capital boost

DRC has joined nine other countries that have ramped up their stakes in Shelter Afrique with Kenya leading with a capital injection of $9.3 million, followed by Cameroon ($3.53 million), Tanzania ($2.67 million), Mali ($2.06 million), and Rwanda ($1.1 million).

The others are Togo ($0.58 million), Cote d’Ivoire ($0.57 million), Eswatini ($0.32 million), and Uganda ($0.08 million).

Shelter Afrique is owned by 44 African countries and three development institutions—African Development Bank, African Reinsurance Corporation and the latest entrant, the African Solidarity Fund, known by its French name Fonds de Solidarite Africain (FSA).

The top five shareholders are Kenya at 17.61 percent, Nigeria 13.15 percent, AfDB 12.71 percent, Mali 5.54 percent and Ghana with 5.28 percent.

DRC joined Shelter Afrique in 2004.