A consortium of local and foreign investors says that the project will set tone on how stakeholders including investors can join forces with authorities and home owners to rid Kigali city of its huge size of informal settlements
Concerted efforts aimed at providing bigger chunks of affordable housing stocks to Kigali city residents has yielded a huge boost in early 2018 with launch of 1,000 housing unit project at Busanza Kicukiro district city of Kigali.
The project is developed by a consortium of local and foreign investors with express objective of resettling Bannyahe slum dwellers in Nyarutarama- in effect Kigali city ’s largest informal settlement straddling three massive shanty towns of Kangondo I, Kangondo II and Kibiraro I.
Once resettled in affordable housing estate in Busanze Kicukiro the site of Bannyahe in Nyarutarama Gasabo will then be turned into site for constructing apartment styled mid class housing.
Stakeholders especially city authorities are saying that the housing project is developed in order to assist in giving a shot at how slum upgradation can actually be executed in Kigali city.
Project developer Savannah Creed Development Co Ltd (SCDC) fronted by local businessman Mr.Dennis Karera say that priority in term of stocks allocation will be offered to resettlement program of Bannyahe slum dwellers before options to other buyers are sought.
SCDC- a US$56 million investment is a joint venture special purpose vehicle (SPV) between Karera’s local investment firm Gold Capital Investment Ltd and a Finnish private equity firm Taleeri.
Sources familiar with the deal say that Taleeri that is meant to provide bulk of the US$56 million needed is not doing its first investment in Rwanda. The company is known to have partnered with Mr Karera and other investors including Kenyan based Fusion capital to execute the Kigali Heights.
Mr. Karera said during the launch;
“The first phase of the project expected to cost US$12 million will be used to provide stocks for the Banyanne slum dwellers in exchange for their parcels of land at the expansive shanty town”.
In line with Taleeri’s similar investments in Kenya, Karera added that the Busanza estate is designed as a mixed use development project. As such home owners will have provision to have access to various forms of amenities such as open playing areas, a modern commercial hub and recreational centre in addition to having a central sewerage system.
He said that the project set to be completed by early next year will succeed if there is increased cooperation of local residents and officials.
Karera counseled, the prospective home owners;
“As investors we need your good cooperation so that we can successfully implement this project,”.
According to project development program, the shanty town of Bannyahe will be dismantled and on its site an ultra modern high rise apartment styled estates that truly reflects aspirations enshrined in the Kigali city master plan will be developed by the same investors.
If that happens it is safe to state that SCDC has a huge appetite to develop a healthy pipeline of more stocks of affordable houses in the market.
Commenting on way forward, the Mayor of the City of Kigali (CoK), Pascal Nyamulinda, said that the project will help the city to provide a practical learning by doing roadmap of how to execute development of organized decent and affordable housing schemes at requisite scale.
“The project will help fast-track the development of decent, affordable housing schemes in the city in tandem with Kigali city master plan,” he said.
The issue of alleviating the housing crisis in Kigali where over 70% city residents live in unplanned or informal settlements has occupied the minds and attention of policy makers for last 10 years.
Despite existence of a lucrative incentive program put in place over last 5 years including provision of grants to reduce development costs backed up by a proactive policy framework developers have been shying away from taking the cue from government seen through supply of limited stocks.
It is estimated that Kigali city needs over 20,000 units annually in order to cope up with rising demand for decent affordable housing. Sources familiar with demand and supply patterns of the housing market estimate that developers need to marshal at least US$400 million annually in order to meet rising demand.