The European Investment Bank (EIB) has invested Sh3.2 billion (€21.5 million) in International Housing Solutions (IHS) Kenya to support the delivery of more than 3,000 affordable homes in some of Nairobi and Kiambu’s high-end neighbourhoods.

The funding aims to make energy-efficient, lower-cost housing accessible to low-income earners in areas that have traditionally been beyond their reach.

Construction is already underway on 664 units at Tilisi Estate in Kiambu, as well as Garden City and Mashiara Park in Nairobi. The projects are tailored for low-income households whose housing needs have remained unmet by the private market.

“With housing costs rising, we are working with experts, planners and policymakers to improve living conditions, reduce energy costs and support climate-friendly urban growth,” said Edward Claessen, head of the EIB Regional Hub for Eastern Africa.

“At EIB Global, we combine both financing with non-financial contribution in the form of technical assistance and advisory services to implement projects with local partners like IHS.”

Beyond the three active developments, IHS is planning 10 other projects with a combined 2,600 units across Nairobi and Kiambu, although the exact sites have not yet been revealed.

“We are on track to deliver about 4,000 quality, affordable green homes by 2030. Projects we undertake are not just developments; they are a promise to the Kenyan market that affordability and excellence can go hand in hand,” said IHS Kenya Managing Director Kioi Wambaa.

“EIB Global’s investment with IHS Kenya aligns with our goals to address the critical need for affordable housing in Kenya. Garden City is an address that embodies modern living, and we are proud to make it accessible to more Kenyans.”

The funding is also expected to help curb the growth of informal settlements while tackling climate change by expanding access to energy-efficient housing for lower-income groups.

Currently, about 58 per cent of Kenya’s seven million urban households live in informal settlements due to the high cost of decent housing.

Besides IHS, the Linzi Finco Trust is another non-state developer in the affordable housing space, having recently issued a Sukuk bond at the Nairobi Securities Exchange.

The government is simultaneously pushing its own affordable housing agenda, with a target to build at least 200,000 units each year using funds collected from the housing levy.