The World Bank Group’s Board of Directors approved Tuesday evening the Egypt Inclusive Housing Finance Programme. The bank said the new US$500 million project would improve access to homeownership and rental units for low-income households in Egypt.
The programme will reach 3.6 million people, including an estimated 1.6 million beneficiaries living below the poverty line and generate an estimated 1.5 million temporary construction jobs over a 5-year period, the life of the project.
This is the first World Bank-financed operation which use the Program for Results financing instrument that can disburse directly against benchmarked milestones as well as strengthen the Social Housing Fund’s systems and capacity in a sustainable manner. The Programme will assist the Ministry of Housing, Utilities, and Urban Development and the Social Housing Fund in setting up sectoral policies that will enhance transparency and accountability, notably through the establishment of monitoring and evaluation systems, an internal audit, and a grievance redress mechanism. The Housing Fund extends financial support to low-income households to enable them to access housing finance and utilizes vacant and unfinished units. The project will assist in developing incentives for private rental investors to rent out their units to low-income tenants.
“The project will foster economic inclusion and sustainable growth through promoting access to adequate housing for the bottom 20 percent of Egypt’s population” said Poonam Gupta, World Bank Acting Country Director for Egypt. “Moreover, it will contribute to increasing private sector participation in the low-income formal housing market in Egypt.”
Egypt has chronic housing shortages and affordability problems. With a housing backlog of up to three million units, Egypt needs approximately 300,000 new housing units per year. 254,000 additional units are needed to gradually deal with the backlog over the coming five years. The relatively low housing production levels and low incomes relative to housing costs have resulted in a rapid growth in informal housing. It is estimated that 12 to 20 million people live in informal housing areas.
“The project will fill in the gaps in the current housing programs benefiting Egyptians with limited income,” said Sahar Nasr, World Bank Lead Financial Economist and Project Team Leader. “It will consolidate existing entities, increase efficiency, and design and implement new programs that are better fit for the needs of the people.”
The Government of Egypt’s Social Housing Program was launched in 2014 to provide one million houses and secure suitable residences for low-income families. The Social Housing Fund (SHF) is the implementing entity of the Government’s Program within the Ministry of Housing, Utilities and Urban Development, which is charged with designing housing regulations and social housing programs. The Housing Fund is also implementing a public rental program to speed up the provision of housing for households in the lowest income brackets, and specifically in poorer governorates.
The World Bank Group has been supporting the development of the housing and financial sectors in Egypt for over a decade through a programmatic approach—a continuum of instruments, ranging from financial services to advisory inputs, knowledge sharing and convening services.
The current portfolio of the World Bank Group in Egypt includes 27 projects for a total commitment of US$5.8 billion in FY15. The World Bank finances projects for faster delivery of benefits to the people of Egypt in key sectors including energy, transport, water and sanitation, agriculture and irrigation, social protection, as well as health and education.
