Cablegate: Opic to Address Affordable Housing in Kigali
DE RUEHLGB #0461 1360559
ZNR UUUUU ZZH
R 160559Z MAY 07
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC 4137
INFO RUEHXR/RWANDA COLLECTIVE
UNCLAS KIGALI 000461
DEPT FOR AF/C AND AF/EPS
DEPT FOR EB/IFD/OMA AND EB/IFD/ODF
USAID FOR AFR/EA, PPC, AND AFR/SD
DEPT PASS TO OPIC FOR BRUCE CAMERON
E.O. 12958: N/A
TAGS: EFIN ETRD EAID ECON PREL MCAP RW
SUBJECT: OPIC TO ADDRESS AFFORDABLE HOUSING IN KIGALI
1. SUMMARY. The City of Kigali, in conjunction with the U.S.
Embassy, hosted an affordable housing workshop with subsequent side
meetings to explore affordable housing issues in Kigali. With the
goals of assisting the City of Kigali to address their housing
challenges and to find opportunities for OPIC involvement in Rwanda,
the meetings produced several potential deals for OPIC and mapped
out a housing strategy for the City of Kigali. END SUMMARY.
2. Affordable housing in a major concern for the city of Kigali.
The Mayor, Ms. Aisa Karibo Kakira, reported that 70% of settlements
in Kigali are unplanned, and that half of the city's residents live
in substandard housing. As Kigali develops, and hotels, office
building, and industrial complexes are built, affordable housing
will continue to impede a planned growth for the city. Lack of
adequate and affordable housing has the potential to create serious
socio-economic and environmental crises.
3. OPIC has been eager to build on its 1972 successful deal with
SOWARTHE, an American-owned tea factory in Rwanda. As there are not
many American investors in Rwanda, it has been challenging to find
suitable opportunities. The following provides an overview of the
projects that have been identified and nominally reviewed by OPIC.
DN International is an American-Kenyan owned construction firm that
has worked extensively in Rwanda, Kenya, and the Democratic Republic
of Congo (DRC). The company is currently developing a housing
project for 1,000 units and it is looking for both technical and
financial assistance. Mr. Nathan Lloyd, the CEO, will travel to
Washington to submit the loan package directly to OPIC.
Steve Clark of Weekly Homes explained that his company is eager to
lend expertise to private developers or the City of Kigali, but is
hesitant to lead any construction project. The CEO of Weekly Homes,
David Weekly, is particularly interested in helping Rwanda on a
private basis, as opposed to through his company, based on a
relationship he personally developed with President Kagame.
AEON Corporation signed an MOU with the governor of the Eastern
Province to build 600 homes in the region. The Oklahoma-based
company is keen on expanding its footprint in Rwanda and is looking
for development sites in Kigali.
Banque Commercial du Rwanda (BCR), one of the largest local banks,
plans to unveil a mortgage product in July 2007. Lack of access to
long term mortgages creates a barrier for many individuals to
purchase homes. BCR is interested in OPIC financing, and is
currently exploring avenues to partner with American investors to
qualify for OPIC funding.
Goodworks International (GI), an advocacy and public relations firm
run by former U.S. Ambassador to the United Nations, Andrew Young,
participated in the meetings and was eager to strike deals with both
the American investors and the GOR. GI representatives reported to
have made direct investments in countries before, but they appeared
to be more focused on providing consulting assistance to the
respective parties in Rwanda.
The city of Kigali has embarked upon a low and medium cost housing
project in the Batsinda district of Kigali. The national social
security fund, Caisse Sociale, has bought the land plot and the
military engineer regiment is doing the construction. The city
would like to find a private developer to take over the project, but
has not been successful thus far.
4. In addition to a lack of established building codes and land
titling, which are currently being developed, the lack of mortgages
presents a huge challenge to the development of this sector. The
Mayor of Kigali endorsed the suggestion to create a type of Housing
Board Authority, made up of both public and private stakeholders to
address these issues.
5. COMMENT: While genuine interest exists from all sides - the
Rwandan Government, American investors, and OPIC, only the potential
deal with DN International appears to be headed for a formal review
by OPIC in the near term.