Ms Isadora Bigourdan, Agence Francaise de Developpement (AfD). Panel discussion: Donor perspectives on housing finance investment in Africa.  Panelists from the Making Finance Work for Africa (MFW4A) Donor Working Group on Housing Finance. With more than 46 cities in Africa swelling to populations of a million people or more — and 17 of the world's 100 fastest-growing cities located in Africa — there is an acute need to develop housing solutions for so many urban residents. But raising the capital to meet that growing demand for housing remains a significant challenge. In 2013, the African Union for Housing Finance (AUHF) will host a conference under the theme "Raising Capital for Housing Finance.” The Africa-China Urban Initiative will organize a conference panel discussion on "Understanding (and harnessing) Chinese investment interest." Chinese investment in residential development in Africa is increasingly having an impact and demonstrating a track record of opportunity and experience. Panelists invited include Chinese investors setting out their experiences and expectations for the market and an African corporation that has received Chinese financing. http://urban-africa-china.angonet.org/content/29th-annual-conference-mobilising-capital-housing-finance

1. Unlocking the housing chain through
innovation and capacity building
AUHF, Mauritius
September 2013

2. Contents
1. The Agence Française de Développement (AFD) at a glance
2. Housing Finance at AFD
2. Challenges and opportunities
2

3. 1
AFD at a glance
3

4. 1.1
Profile
 A Public (state owned) Financial (banking status) Institution,
registered under French Laws, created in 1942.
 AFD group: AFD, Proparco and FFEM (secretary)
 The main implementing agency for France’s official development
assistance: 7 billion euros of financing in 2013.
 Three main objectives :
 Reducing poverty and inequalities;
 Promoting sustainable economic growth;
 Preserving Global Public Goods (climate, biodiversity, global
public health…)
4

5. 1.2
A worldwide establishment
5

6. 1.3
Various and numerous counterparts
Dette publique au sens FMI
Hors dette publique
Etats
Acteurs potentiellement
finançables en nonsouverain
Banques centrales
Collectivités locales
Banques publiques
Entreprises publiques
Entreprises privées
Banques privées
ONG
institutions internationales
6

7. 1.4
7
AFD has a complete range of
financing tools
7

8. 1.5
8
AFD works in a wide range of sectors
8

9. 2. Housing Finance at AFD
9

10. 2.1
Rationale
 Moto : support innovative and efficient initiatives to
unlock the housing chain in Africa
 Main focus:
Support housing finance to the benefit of the middle to low
income households
Promote “green and sustainable housing” initiatives
Cooperate with all stakeholders:
Work with national and local authorities to simplify the
regulation towards housing, to secure the land and to
integrate housing into the cities
Provide adequate funding
Support the private sector in innovative approaches
10

11. 2.3
A recognized expertise in social housing in French
Overseas Regions
 An important role in financing urban development and social housing in French
Overseas Regions
 equity investments : AFD owns shares in 7 companies (“the SIDOM”) that
build and manage social housing
 debt financing : AFD funds urban development programs and construction
projects
 In 2012 :
 110 M€ of loans for urban development and construction in French overseas
regions
 3.300 housing units built by the SIDOM
 AFD aims at reinforcing its role in the housing and urban development sector in
French Overseas Regions
 by setting up specific financial products
 by deepening its links with the SIDOM (governance and financing)
11

12. 2.4
A wide range of partners in Africa since the 70s
Local authorities and cities, as well as their operators
Specialized mortgage institutions : Uganda, Bénin, Sénégal,
Tunisie
Urban planer or Developers: Morocco, RSA
 Commercial banks
Financial intermediaries
Mortgage insurance company
MFIs
 Housing private companies
12

13. 2.5
A sample of operations
A strong partnership with Shelter Afrique
 Supporting their institutional lending activities
and their « social housing » programme through
soft loans and grant (2008 and 2013).
 Supporting the enhancement of the insitution and
financial innovation in affordable housing through
grants
13

14. 2.5
A sample of operations
A strong cooperation with Al Omrane in Morocco
 A regular support to the operator in financing
and TA, especially on ESMS issues.
 Acting to develop and regulate the affordable
housing sector in Morocco through an
innovative and integrated approach.
15

15. 2.5
A sample of operations
HFGA : Supporting a deposit mortgage insurance company
 Replicating a successful business model that has been
developed and run in RSA by HLGC for more than 20 years.
 Currently operating in Ghana, Rwanda, Kenya, Uganda,
Zambia and Tanzania
16

16. 2.5
A sample of operations
LAPO in Nigeria: designing a new housing microloan, in
cooperation with Lafarge, a cement company
 Soft loan in local currency (NGN) to support the development
of a housing product (pilot phase)
 TA grant to build the MFI capacity towards housing
 Strong partnership with Lafarge, providing building TA
 Cooperation with Global Communities
 On-going process: project started in September 2013.
17

17. 2.6
Next steps
 Share experiences and support innovation through the
Donors’ group coordinated by Making Finance Work for
Africa
 New model/methodology to operate in the sector, to
identify and support innovative initiatives
 Next “Private Sector and Development” review edited by
AFD group devoted to housing finance
18

18. 3
3. Challenges and opportunities to address the
housing issues in Africa
19

19. 3.1
Feedback from AFD’s experience in housing finance
 Lack of integrated and effective public policy towards
housing, with poor regulation and management on land
 Insufficient cooperation between the public authorities and
the private investors to design a proper model for mass and
affordable housing
 Poor investments on infrastructure to enable the production
of mass housing
 Failure of financial markets and regular financial tools, with
bad perception from the private investors
20

20. 3.2
« Thinking outside the box »
 Integrate housing in its environment and provide long
standing solutions
 Strengthen and ease the cooperation between the
government, the local authorities and the private
investors: identify mature projects for donors to support
 Create an attractive business environment to mobilize
capital for housing finance
 Structure and enhance the housing sector as a whole
(public authorities, developers, investors and end users)
with knowledge management, training and TA services
21

21. Many thanks for your attention
Isadora Bigourdan, Investment Officer in charge of Housing Finance,
at the Financial Institutions and Private Sector Support Division,
bigourdani@afd.fr
22