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IFC and Senegal’s Sovereign Wealth Fund Partner to Develop Affordable Housing in Senegal

To help increase the supply of affordable housing in Senegal, where demand is growing rapidly, IFC and Senegal’s Sovereign Wealth Fund, FONSIS, today partnered by signing a Collaboration Agreement, to develop 20,000 modern homes in the country, over the next 8-10 years, through the dedicated vehicle created by FONSIS, Kajom Capital.
Under the agreement, IFC and FONSIS will acquire quality houses from developers and make them available to lower-income earners, through a rent-to-own scheme, helping thousands achieve their will of owning their own home. 
In Senegal and elsewhere, developers are often reluctant to build lower-cost housing because potential buyers struggle to save or borrow the funds they need to make a down payment or purchase a house. The partnership between IFC and FONSIS will therefore address both supply and demand side challenges in Senegal’s affordable housing market. 
The project will kick-off by supporting the development of 200 houses in the region of Dakar. Roughly 120,000 families are expected to benefit directly in the long run from this initiative, which will also create numerous jobs locally in the construction industry. 
“This rent-to-own vehicle, besides accelerating and fostering access to property, will also encourage Senegalese people to save and better plan for their retirement and children's education; it will offer investment opportunities to financial structures like insurances”, said Papa Demba Diallo, CEO of FONSIS.

“Increasing access to quality affordable housing is critical to accelerating social well-being and economic development,” said Makhtar Diop, IFC Managing Director. “IFC is proud to partner with FONSIS to help address Senegal’s affordable housing supply shortage through an innovative, private-sector led solution.” 

Rapid population growth in Dakar is straining the housing supply, especially for affordable housing. Dakar’s housing deficit alone is estimated at 160,000—with a shortfall of 370,000 homes across all of Senegal.
The partnership between IFC and FONSIS directly supports the Government of Senegal’s goal of ramping up the supply of affordable homes in the country by 100,000 units by 2025 through its “100,000 Logements” program. 
The project is expected to attract an initial IFC investment of about $10 million over the medium term and more than $50 million over the long term. IFC and FONSIS expect to mobilize and attract other local and international institutional investors to support this development project.