Eskom pension sets aside R100m for Low cost housing development in SA

From L to R; Rob Wesselo of IHS, Sibusiso Luthuli, CEO Eskom Pension and Provident Fund, Soula Proxenos, Managing Partner of IHS, Fagmeedah Petersen-Lurie, CIO of Eskom Pension and Provident Fund.

IN a move likely to boost the development of housing in South Africa, Eskom Pension and Provident Fund has pledged R100-million towards the development of 20 000 new low cost houses in the country.

The project is a joint venture between Eskom and global private equity funder International Housing Solutions (IHS).

The investment by Eskom Pension and Provident Fund is into the IHS Fund II which was launched last year following the unprecedented success of the company's first fund called the SA Workforce Housing Fund (SAWHF).

The move by Eskom Pension Fund comes shortly after global equity funder, International Housing Solutions received half a billion rand from the National Housing Finance Corporation (NHFC) and IFC.

Sibusiso Luthuli, Eskom Pension and Provident Fund CEO the affordable sector has shown great resolve to improve the lives of many people in South Africa by making available house that they can afford. He added that this would also give big returns to investors.

"We are very proud to be part and parcel of this great international initiative with a reputable organ like the International Housing Solutions because of its good history and record in providing and building quality communities while maintaining the highest level of oversight and financial due diligence," said Buthelezi.

Luthuli went further to say that the investment would go a long way into having a positive social impact on many pensioners who solely depend on the Eskom Pension and Provident Fund for them to stay healthy.

The Eskom Pension and Provident Fund is the second largest fund in the country that offers big benefits like retirement, withdrawal and disability benefits to all its members. On top of these benefits the fund also offers its members death benefits for members that are still working for the company and to deferred pensioners and to all pensioners. All these benefits are also paid to members qualifying beneficiaries.

A total of 28 000 homes with a combined value of over R8.6 billion throughout the country were able to be financed and developed by the US$230 SAWHF.

IHS is the first international institutional investor to recognize the need to develop houses that are affordable to majority of people in the African markets. This has been of great financial benefit to investors and also been of great help to families who feel they can be able to afford having houses they are able to pay for and which also lead to their wealth creation since they own the property.

Soula Proxenos, a managing partner at IHS, said that it was good to see that through ownership of property many owners felt they their lives had improved for the best.

"The latest research into the provision of affordable housing in the country (SA) has shown that it not only brings with it better and improved welfare and social cohesion but helps drive for opportunities and wealth creation," said Proxenos.

She added that IHS was happy with the investment by Eskom was a good move because it will strengthen the sector and the economy as many families get opportunities to own property. Majority of home owners in this category are mainly employees in the public sector earning between R3500-R1800 on a monthly basis.

"We aim to make a contribution by supplying additional housing stock in this market that we see as under-supplied," said Proxenos.

She added that government alone cannot be able to provide low cost housing for people and pleaded with the private sector to play its role in ensuring that people have houses.

The fact that the project is being backed by international investors’ shows that South Africa has its door open for business, a positive aspect in the growing of the economy, concluded Proxenos.