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IFC uses finance tool to unlock $500 million in housing finance in West Africa

Africa Business Communities
Tue, 30-Jan-2018, 10:33
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Using an innovative finance tool to spur more development in low-income countries, IFC, a member of the World Bank Group, has announced the completion of a $9 million investment that aims to expand the availability of housing finance by $500 million in eight west African countries in the next four years.

The investment in Caisse Régionale de Refinancement Hypothécaire de l’UEMOA (CRRH-UEMOA) marks the first time IFC has tapped into the $2.5 billion IDA18 IFC-MIGA Private Sector Window—a development finance tool created to catalyze private sector investment in the lowest-income countries eligible for financing from the World Bank’s International Development Association. The window has a particular focus on encouraging private investment in fragile and conflict-affected areas.

IFC recently purchased $9 million in 12-year local-currency bonds issued by CRRH-UEMOA, a mortgage refinancing company sponsored by the West African Development Bank. The transaction supports the extension of maturity of bond issuances by the company, which serves the eight countries of the West Africa Economic and Monetary Union—Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo. The goal is to increase housing finance while deepening local capital markets.

“IFC’s objective of doing more in the poorest countries requires new tools and approaches for mobilizing private capital,” said IFC CEO Philippe Le Houérou. “Disciplined and focused use of new instruments like the Private Sector Window can create markets that raise living standards, improve people’s lives—and in this case, create affordable housing for thousands of families.”


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Housing is a major development challenge in the countries of the West Africa Economic and Monetary Union, which face a housing shortage of 3.5 million units. Fewer than 7 percent of households in the region can afford to buy their own home.

This investment continues the Bank Group’s strategic partnership with the West Africa Economic and Monetary Union and CRRH on developing the housing finance market in West Africa, building on previous engagements through IFC’s equity investment in the company and IDA’s lending through its Scale-Up Facility to the West African Development Bank for CRRH.

“IDA is significantly scaling up its engagement in Africa, including through operations that help de-risk private sector investments,” said Axel van Trotsenburg, Vice President, Development Finance at the World Bank. “This innovative approach, which is being implemented with IFC, is meant to stimulate private sector activities in more challenging environments and create new markets in Africa.”

CRRH has made significant progress over the last few years facilitating nearly 8,000 mortgages since its inception in 2012. But its ability to expand is still limited by a combination of factors, including the low development of the housing sector in the region as well as the scarcity of long-term capital in the local currency.

In its transaction with CRRH, IFC aims to enable the mortgage refinancing company to ramp up its housing portfolio at the same time as it helps extend the local bond market yield curve. Without the Private Sector Window support through its local-currency facility, IFC would not have adequate local currency to purchase the CRRH-UEMOA bonds.

The window provides a protection against currency fluctuations that enables IFC to purchase the bonds. The local currency facility allows IFC to provide financing in local currency for high-impact projects in countries where local currency solutions are under-developed or non-existent.

Christian Agossa, Chief Executive Officer of CRRH-UEMOA said: “We are confident that the landmark IFC investment will strengthen our local UEMOA bond investor base in our longer maturities issuances, as well as raise the interest of international investors for CRRH-UEMOA bonds.”

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