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Nigeria: Shelter Afrique approves a $19.5 million line of credit to a Nigerian company for affordable housing

  • Shelter Afrique has granted a line of credit of $19.5 million to the real estate company Mixta Real Estate PLC based in Lagos
  • The 7-year facility with a 24-month moratorium was structured to co-finance investments in Mixta’s affordable residential projects and for debt refinancing
  • Of this amount, US$9.75 will be used to co-finance 1,171 affordable housing units comprising the ongoing Beechwood Park project (187 units) and New Marula projects (984 units)

Shelter Afrique has granted a $19.5 million line of credit to the Lagos-based real estate company Mixta Real Estate PLC.

According to the pan-African housing development financier, the 7-year facility with a 24-month moratorium was structured to co-finance investment in Mixta’s affordable residential projects and for debt refinancing.

Of this amount, US$9.75 will be used to co-finance 1,171 affordable housing units comprising the ongoing Beechwood Park project (187 units) and the New Marula projects (984 units).

The remaining $9.75 will be used to repay a portion of Mixta’s 7-month commercial paper raised in the capital market with the aim of reducing the total commercial paper.

“The agreement with Mixta Real Estate PLC appeals to us because in addition to addressing the development of affordable housing, it also stimulates the rapid growth of housing supply, reinvigorates the development of the mortgage sector and integrates a development finance solution which makes the sector attractive to financiers,” said Shelter Afrique Ag. Managing Director Kingsley Muwowo.

Commenting on the deal, Mixta Africa, Executive Director and Chief Financial Officer Benson Ajayi, said enabling access to housing and property at affordable prices is the company’s main priority.

“Shelter Afrique’s funding is a validation of Mixta Africa’s housing and infrastructure development credentials. We are pleased to receive this funding approval after a rigorous due diligence process. In addition to accelerating the delivery of sustainable and affordable housing, the transaction will also strengthen The company is delighted with the support of Shelter Afrique and looks forward to working with Shelter Afrique to fulfill its affordable housing mandate across Africa,” said Ajayi.

Shelter Afrique has a long-term relationship with Mixta Africa dating back to 2014, when the company awarded Mixta (formerly ARM Properties PLC) $6 million to co-finance the development of 13 blocks comprising 130 apartments and related infrastructure services for sale to the public. The project was completed and the loan was fully repaid.

In March 2021, Shelter Afrique’s Board of Directors approved a corporate loan in the form of a USD 13 million line of credit in favor of Mixta. The 5-year facility was to be onlent to Mixta’s real estate development subsidiaries to finance the Group’s current real estate portfolio consisting of three key housing development programs of 889 low to medium housing units in Morocco (371 units), Senegal (162 ) and in Côte d’Ivoire (356 housing units).

“We are currently jointly reviewing some terms and conditions of this facility, and loan agreements between the two parties are expected to be signed soon,” Muwowo said.

The facility is expected to directly impact over 1,171 families, provide housing for over 4,684 people (average household size in Lagos is 3.8) and create at least 2,342 jobs.

Nigeria pays $7.15m for bigger stake in Shelter Afrique

In a related story, Nigeria recently paid US$7.15 million to acquire a larger stake in Shelter Afrique.

In June 2022, The Exchange Africa reported that Shelter Afrique had acquired a new capital contribution from the Federal Government of Nigeria.

The newly acquired shares brought Nigeria’s total stake to 15.8%, putting it one percentage point behind the largest shareholder, Kenya, whose stakes currently stand at 16.85%. The African Development Bank (AfDB), which now stands at 12.16% against 12.71%, Mali at 5.3% against 5.54% and Ghana at 5.05% against 5.28%, are the other three main owners of Shelter. Africa, whose shareholding has now changed.

Muwowo commended the Nigerian government for its vote of confidence in the organization. He went on to say that this move puts When Nigeria has met all of its capital obligations, the government will be in an excellent position to take over as the majority shareholder of Shelter-Afrique.

Nigeria increases stake in Shelter Afrique with $29.3m