Pan African housing financier Shelter Afrique, BRD revive Nyarugenge district’s US$130 million low cost housing Project
Efforts aimed at boosting the supply low- cost housing stocks in Kigali received a huge boost following the revival of a previously stalled US$130 million real estate housing project.
The revival of previously stalled housing project at Nyamirambo area in Nyarugenge district is now set to move to construction phase after Pan African housing financier Shelter Afrique and Rwanda Development Bank (BRD) reached consensus on financial closure.
The project site known to host one of the largest informal settlements in Kigali city has stalled for nearly two years due to the complexities arising from expropriation and financing.
Consequently, the project’s revival has sparked optimism of providing over 14,000 Rwandans with decent low cost accommodation. The issue of providing bigger stocks of affordable housing stocks is something that will continue taking centre stage in actualization of Kigali city’s conceptual master plan where it is currently estimated that over 60 percent of city residents live in informal dwellings.
The context of affordable housing provision in Rwanda can best be described as a case of huge demand being met by very limited supply. Authoritative studies commissioned by Kigali city authorities and ministry of infrastructure indicate that Kigali needs huge stocks of affordable houses estimated that over 150,000 units and growing at over 25 percent annually.
One of the prominent studies dubbed the housing market study states that;
“The quantity of housing production is still low and its cost does not match the purchasing power of the majority. Most city residents still access housing through informal practices, because the formal sector cannot offer housing access schemes which cater to all”.
The study adds that ;
“ A number of circumstances result in the situation where most housing developments address only a minority of customers, among whom demand has not even been saturated yet”.
In response to the huge opportunity in the provision of low cost homes , Shelter Afrique and BRD entered into an investment partnership with Kigali City authorities and Rwanda Housing Authority to conceive a project in Nyarugenge district meant to supply over 2,000 units upon completion after a planned 3 year construction period.
Signifying that financial closure of the project is done deal, BRD CEO Eric Rutabana said; “We want it to be launched very soon.” The announcement came after the two investing parties met with Rwanda’s Minister for infrastructure, Claver Gatete, and come up with a clear plan of starting full implementation of the project.
“Our organization was carrying out restructuring of its internal processes. That is the reason why there was a delay in the financial closure of the project. Now that we have completed the process, we are open for business, and part of that business is to implement this huge public-private partnership project.”
The BRD CEO added that the expropriation process which entailed paying off occupants at project site, took longer than expected, thereby compounding further delays in planning process. Construction activities are expected to start early next year.
The proposed Rugarama park estate is aimed at building about 2,800 affordable houses on a 42 hectare plot. Under terms of the investment partnership, the City of Kigali undertook to provide project site hence the planned expropriation which was meant to give rise to construction phase whose estimated cost was set at over US$130 million.
“We split the project site into two major plots with one contractor taking 30 hectares to be built at an estimated cost of US$60 million while the second contractor taking balance of 12 hectares whose estimated cost is yet to be firmly established ,”
The project upon completion is expected to accommodate 14,000 people in addition to creation of hundreds of temporary and permanent jobs. Rutabana refuted claims that the final retail prices of the finished stocks of the project will fall beyond the range of being termed affordable.
“The finished stocks of basic units are meant to retail for approximately Rwf 15 million while more advanced units will retail for approx. Rwf 32 million”.
By Julius Bizimungu