Wednesday, November 5, 2008

Zambia agrees $170 million funding for housing projects

LUSAKA (Reuters) / 02/10/2008

Zambia has agreed financing deals totalling $170 million with European and African lenders and selected Chinese firms to build houses in key mining towns and a famed tourist city, a senior industry official said on Thursday.

Zik Zekko, the chief executive officer of the National Housing Bond Trust (NHBT), said 1,211 houses would be constructed in the new copper mining town of Solwezi in northwestern Zambia, the ancient copperbelt city of Kitwe and tourist resort city of Livingstone.

A surge in copper production has created critical housing shortages in the mining areas.

Zekko said Pan-African bank, the PTA Bank, Shelter Afrique, the Development Bank of Southern Africa (DBSA) and International Housing Solutions, an associate of the World Bank's International Finance Corporation (IFC) would be the principle financiers for the projects.

He also told journalists that Standard Chartered Bank would place a bond with Zambian pension funds and insurance firms on the Lusaka Stock Exchange to raise $34 million of the $170 million for the housing projects.

"In all the three pilot projects, a total of $170 million is required to build houses (and) hence we have had to consider going outside our market to source funding," Zekko said.

Zekko said contracts had been awarded to Chinese firms, Yangtsi Jiang, China Jiangxi and Sichuan International Technical Corp., to construct the houses.

The houses would be sold to Zambians, enabling the NHBT to repay loans from foreign lenders, while foreigners would only be considered if there was not enough demand from locals.

The NHBT had also applied for tax exemptions on imported building materials to enable it to price the houses cheaply.

The NHBT was also in talks with the German-based Africa Development Corporation to fund more houses.

He said financiers were also watching closely the political climate ahead of the presidential elections due on October 30.

"As long as we don't throw stones (during presidential elections) in October, everything should be fine," Zekko said.