The Eskom Pension and Provident Fund (EPPF) on Tuesday committed R100-million to private equity investor International Housing Solutions’ (IHS’s) second affordable housing development fund.
IHS Fund 2, which was launched last year and already had the support of the International Finance Corporation (IFC) and the National Housing Finance Corporation (NHFC) – which had jointly committed more than $63-million – would aim to develop around 20 000 new affordable homes in South Africa.
IHS’s first fund was formed in 2007 and had enabled the development of 27 000 housing units in the affordable housing space across South Africa.
“We hope to achieve that and more [through] our second fund. And with NHFC, IFC and now the commitment from the EPPF, we are confident that we will be able to achieve this goal,” IHS managing partner Soula Proxenos said at the signing ceremony on Tuesday.
She added that IHS was not only building housing but was also creating communities and job opportunities.
Proxenos told Engineering News Online that while IHS had already discussed potential projects to be included in Fund 2, it had not yet started with the development of these.
“We will commit to deals through the course of the next number of months and, depending on where those deals are, we may [join] developments that have already started or provide early funding that allows a project to get started,” she said.
Also speaking at the ceremony, EPPF CEO Sibusiso Luthuli said housing had been at the forefront of South Africa’s national agenda for a long time; however, government housing programmes were not adequate to meet the needs of all South Africans, especially those in the “gap market”, which was defined as households that earned too much to qualify for government’s low-cost subsidised housing, but too little to afford the cheapest private-sector houses or qualify for bonds.
“Current estimates [state] that about 7.5-million South Africans live in inadequate housing, placing the [housing] backlog at an estimated 2.1-million to 2.5-million units,” he said, adding that government alone could not address this backlog.
Luthuli further said the investment into IHS Fund 2 was in line with the EPPF’s development impact policy, which prioritised investment into affordable housing initiatives across the country to increase the EPPF’s ability to obtain a social dividend on top of financial dividends.
“We are convinced that this investment will make a substantial positive impact on the lives of the hundreds of thousands of pensioners who rely on the EPPF to remain in healthy shape,” Luthuli concluded.