FRI, FEBRUARY 17 2017-The African Development Bank (AfDB) said Thursday that it is arranging for an immediate loan of US$20 million for Shelter Afrique, a Development Finance Institution investing in affordable housing for Africa. The loan is to help Shelter Afrique consolidate its position in 2017 and beyond, according to AfDB.
The announcement comes shortly after the Bank injected on February 1, 2017 an equity investment of US $8.2 million in Shelter Afrique.
Gabriel Negatu, Director General at AfDB’s East Africa Regional Development and Business Delivery Office, said “these new resources show that the African Development Bank is fully committed to the growth and development of Shelter Afrique, which plays a vital and unique role in the development of affordable housing across Africa.” He also harped on the issue of governance, which he says the AfDB takes very seriously.
“Affordable housing is a key issue at the heart of the High 5 priorities for our Bank, namely ‘Improve the quality of life for the people of Africa,” he added.
Shelter Afrique has recently been the subject of press speculation of overstated asset quality and substandard management operations. Following those allegations, the Board of Directors of Shelter Afrique took immediate steps and appointed a reputable firm to conduct an independent forensic audit. That investigation concluded on January 2, 2017 and recommended improvements in policy and processes which will be implemented by Shelter Afrique.
Soon after the forensic Shelter Afrique announced that it will fundamentally improve its governance structure. Several interim executive managers are now being contracted by Shelter Afrique’s Board to improve financial management and governance. Shelter Afrique said its Board will also take appropriate disciplinary actions to address the irregularities and shortcomings identified in the forensic audit report.
The shareholders also agreed to expand the shareholder base to include African and non-African impact investors this year and take Shelter Afrique to the next stage of its development. The ADB said it intends to work with Shelter Afrique’s management and Board to support the company with technical and business development assistance throughout 2017.