Stanbic, Acorn Holdings partner on $700mn green student housing deal

Stanbic Bank Kenya, along with MiDA Advisors, has announced a partnership with Acorn Holdings, a renowned real estate developer, to facilitate a $700 million blended finance commitment for green, affordable student housing in Kenya. The proposed transaction includes a $180 million commitment from the United States Development Finance Corporation (DFC), which will leverage over $380 million in total funding. Alakh Kohli, Head Of Corporate Investment at Stanbic Bank Kenya, shed light on the details of this groundbreaking initiative during an interview with CNBC Africa's Tabitha Muthoni. The partnership with the U.S. DFC is a strategic collaboration that aims to address the financing gap in critical sectors, especially in developing economies like Kenya. By teaming up with financial institutions such as Stanbic Bank, the U.S. DFC plays a crucial role in providing access to finance for vital investments. One of the key aspects highlighted by Alakh Kohli is the significant role that the Kenyan capital markets will play in this financing deal. The investment presents local investors with the opportunity to diversify their portfolios by tapping into the real estate asset class. With a substantial portion of institutional investors' assets currently allocated to fixed-income securities, this project offers a chance for investors to access a new asset class that not only deepens the capital markets but also provides income-generating streams. In terms of expected returns on investment, Kohli mentioned that while specific details are still being finalized, all stakeholders involved will be adequately compensated for their investments. The project's sustainability aspect aligns with Stanbic Bank's commitment to eco-friendly investments and sustainable finance solutions. Furthermore, the blended finance structure utilized in this deal addresses critical issues such as tenor and investment size. By leveraging innovative financial solutions, Stanbic Bank aims to deliver long-term sustainable solutions that meet the region's pressing investment needs. Kohli highlighted past projects like the road infrastructure initiatives, where similar blended finance approaches were successfully implemented to address infrastructure demands in Kenya. The green financing aspect of the project also draws from Stanbic Bank's experience with the first green bond in East Africa, which was issued in collaboration with ACORN in 2019. The lessons learned from the green bond issuance, including the demonstration of commitment to sustainability and the importance of collaboration, will be applied to the student housing project. The initiative not only aims to provide sustainable housing solutions but also to educate and promote sustainability practices among students. Stanbic Bank Kenya's focus on sustainability initiatives extends beyond this project, with ongoing efforts to promote sustainable finance across Kenya and the region. With a strong commitment to environmental stewardship and innovative finance solutions, Stanbic Bank is paving the way for sustainable investments and developments in the region.