Acorn Holdings has secured Kes 23.6 billion from the U.S. Development Finance Corporation for affordable student housing.
The student hostel developer said the funds will develop 35 less costly student housing units, adding 48,000 student beds to Acorn’s portfolio and creating about 50,000 jobs.
Up to $90 million will be donated to the Acorn Student Accommodation Development-Real Estate Investment Trust (ASA DREIT) to construct the new PBSAs.
Further, Acorn says it will use the funding to secure over $380 million and crowd in over $315 million in financing from the Kenyan capital markets.
The markets include domestic pension funds and asset managers, for a total blended financing of $700 million over the 18-year life of the transaction.
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Speaking during the signing in Washington, D.C., Acorn Holdings Chief Executive Officer Edward Kirathe said the funding will allow the company to continue contributing positively to Kenya’s affordable housing agenda.
“By being Africa’s largest-ever deal of its kind, it asserts Acorn’s commitment to the development and provision of safe and affordable housing for students in Kenya, whilst confirming the tremendous confidence the U.S. DFC has in Acorn and by extension, the opportunities in the country.”
The financing deal, which will be repaid in 18 years, involves MIDA Advisors as lead arranger and advisor, Stanbic Bank as joint lead arranger and lender, Prosper Africa and USAID providing technical assistance support, and Morrison Foerster, HillStern & Morley, IKM Advocates, and TripleOKLaw Advocates as legal advisors.
