DEBT INSTRUMENTS
Shelter Afrique provides direct loans (construction/development loans) to developers) for financing projects relating to:
- development of new housing estates
- infrastructure provision through site and services schemes
- neighbourhood and housing improvements;
- commercial projects (office buildings, rental housing, shopping centres and so on).
- construction of hotels and tourism projects (in collaboration with Afrexim Bank)
Construction loans are short and medium term loans with tenure of 1-5 years advanced to developers to co-finance real estate projects for outright sale. Rental projects may be considered where the cash flows could repay the loan within the given tenure. Shelter Afrique will bear the underlying risks of the projects funded and keep them in its books until they are fully repaid. It also originates, carries out all the required due diligence and underwrites the loan and monitors performance. Under this arrangement, lending to any single project shall not be more than 10% of total equity/shareholders funds or 60% of the total project cost, whichever is less.
Shelter Afrique therefore seeks co-financing arrangements and opportunities with both local and international financial institutions as part of its mandate to mobilization additional resources for housing development in Africa. It uses lending instruments and products such as Participation loans, which will allow the assignment or sale of part of or all loan assets it has underwritten to a third party while it (Shelter Afrique) continues to retain monitoring and servicing responsibilities.
Syndicated loans: with Shelter Afrique as the lead syndicate or a member of the syndicate to raise funds jointly with other financial institutions to finance large scale housing and infrastructure loans. This will mobilize additional resources and increase the scope of Shelter Afrique?s programmes
The indicative terms and conditions of Shelter Afrique?s construction/development loans are available.
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