Acorn Holdings secures Sh. 23.6B funding from the U.S. DFC
Business
By
Esther Dianah
| May 24, 2024
Acorn Holdings Limited has signed a Sh23.6 billion ($180 million) financing deal with the US Development Finance Corporation (DFC) for the development of affordable student housing in Kenya.
The financing will see development of 35 new affordable student housing units in Kenya which will offer a package of key essential services and amenities at an affordable monthly rate to students.
Upon completion, an additional 48,000 beds will be added to Acorn's portfolio, taking the total bed offering to students in Kenya to 69,000 while creating over 50,000 direct and indirect employment opportunities.
The signing, which was witnessed by President William Ruto during US-Kenya Business Forum hosted by the US Chamber of Commerce at their headquarters in Washington DC, becomes Africa's largest affordable student housing deal.
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Speaking at the signing ceremony, Acorn Holdings Chief Executive Officer, Edward Kirathe said that they take pride in signing the landmark deal for the expansion of affordable student housing offering in Kenya.
According to Mr Kirathe, the deal accords Acorn the opportunity to continue contributing to Kenya's affordable housing agenda.
The financing will be repaid over a period of 18 years and shall provide a long-term and sustainable financing solution for Acorn.
Sh11.9 billion ($90 million) will go to the Acorn Student Accommodation Development-Real Estate Investment Trust (ASA DREIT) for use in the construction of the new PBSAs.
This amount will be recycled up to two times during the term of the loan, facilitating up to Sh35.8 billion (USD 270 million) in financing through redeployment.
The remaining Sh119 billion will go towards the Acorn Student Accommodation Income-Real Estate Investment Trust (ASA I-REIT) to finance the acquisition of stabilized Purpose-Built Student Accommodations from the DREIT. In addition, the financing from DFC will be used to secure over Sh50 billion ($380 million) in Kenya Shilling equivalent arranged by Stanbic Bank Kenya (part of Standard Bank Group).