The Pan-African housing financier Shelter Afrique has entered a deal with the government of Cameroon to set up a prefab factory to provide low-cost construction materials.
The Nairobi-based lender said on Wednesday it has approved establishing the $15 million Industrial Housing Corporation (IHC) in either the capital Yaoundé or the economic hub Douala.
Shelter Afrique will own a 51 percent stake in IHC, with the Cameroon government taking 49 percent shareholding.
The lender will finance the construction of the factory, which will produce building materials such as polystyrene block production plant, panel production plan and other associated equipment.
“The Government of Cameroon will designate a location and provide the relevant land where the factory will be situated close to the main towns – either in Yaoundé or Duala,” said Shelter Afrique CEO Andrew Chimphondah.
The lender said Cameroon has a huge deficit of contractors with adequate capacity and logistics, resulting in high construction costs, low building quality, and occasional delays in delivering large housing.
“We strongly believe that the establishment of Industrial Housing Corporation is the appropriate contribution by Shelter Afrique to address the problems facing provision of affordable housing in Cameroon through capacity building,” he said.
Mr Chimphondah said the firm hopes to replicate the prefab concept to its other member countries.
Prefabricated houses have been gaining traction in recent years as a low-cost housing option as it cuts the building time by almost a half.
The houses are manufactured in factories, usually in standard sections, which are shipped and assembled on-site.
“When established, the factory is expected to reach a minimum annual production capacity of 1,500 affordable houses,” Mr Chimphondah said, adding that product pricing will be affordable to enable mass acquisitions.
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 shareholders have in the last six months injected $2.5 million, helping it clear debt and plan for a $993.6 million bond offer.