Govt to examine a Diaspora Fund to finance local housing development
As the PPP/C Government forges ahead with its extensive housing programme, President Irfaan Ali has disclosed that they are currently working on a series of initiatives aimed at financing projects for the local housing sector.
Among these initiatives being considered is the establishment of a Diaspora Housing Fund.
Delivering the feature address at the launch on Friday of the “Dream Realised” housing initiative being held at the National Stadium in Providence, President Irfaan Ali noted that the housing sector is not just about issuing house lots and building homes.
To this end, he disclosed that his Government is currently examining ways in which the Guyanese diaspora can be involved in housing development not only through ownership but also providing financial resources.
“There is great potential in creating a Diaspora Fund that can be utilised in a sector like the housing sector and this is also under consideration at the moment – creating a Diaspora Housing Fund. They get 0.5 per cent interest at prime and if they have an investment that gives you over 1.5 per cent return or two per cent return then you’re creating a new market and we’re creating new access to capital. This is the vision,” Ali, who is a former Housing Minister himself, stated.
The Head of State added that Government is also looking at other areas of securing financing for the housing sector. This includes efforts to raise some US$250 million for housing projects.
Last weekend, Government published an ad inviting Expressions of Interest (EoIs) from interested parties to finance housing development. Entities desirous of participating in this financing activity are invited to submit a proposed term sheet detailing: interest rate and terms; detailed term sheet clearly outlining assumptions and expectations; time period to conclude financing; capability and experience of participating entity, and such other terms and conditions as may be relevant.
Government will then assess the EoIs and select the parties to negotiate/participate in a Housing Financing Development Plan.
According to the President, the response to this initiative has been overwhelming.
Further, President Ali went on to highlight that they are also reaching out to bilateral partners to secure funding for his Administration’s housing programme.
“We have already engaged at the bilateral, multilateral and regional level, many agencies. Every single Head of State I spoke with so far, I have outlined housing as a top priority and asked that financing of the housing programme be taken into the consideration of their development fund,” he stated.
In fact, the Head of State noted that his most recent conversation was with the Emir of Qatar, His Royal Highness Sheikh Tamim bin Hamad Al Thani, via telephone on Tuesday during which he requested that financing from the Qatar Fund For Development (QFFD) be considered to expand Guyana’s housing programme.
A statement from Office of the President had noted that the two leaders committed to mobilising technical teams from both countries, immediately following the discussions. The teams will include the Foreign Ministers of both countries as well as the Energy Minister from Qatar and Guyana’s Natural Resources Minister and Agriculture Minister.
Following the engagement, the teams are expected to proceed to design programmes and projects to access resources from the QFFD.
However, with these initiatives being undertaken to boost the housing sector, President Ali further posited during Friday’s address that Government now has to ensure that the necessary infrastructure and services are available to persons as they pursue the milestone of homeownership.
In this regard, he underscored Government’s commitment towards working with the Private Sector.
“We’re bringing together the hardware stores, the banks, the builders, the contractors, the developers and all of this is geared towards achieving economies of scale. If we give the banks a ready market of 25,000 homes, it is reducing their marketing cost to go after customers and reducing many other costs. Even operational cost becomes less because although you’re processing more, your operational cost will come down. These are the type of intangible benefits from a comprehensive housing system that you don’t see physically but you benefit from,” the Head of State outlined.
The PPP/C Government plans to distribute 10,000 house lots and build 5000 homes annually over the next five years.
In fact, President Ali disclosed that Government is looking to “break ground” for the construction of the first 5000 homes in November. As such, he urged citizens to consider this option that Government is working to make available.
“We did the calculation, if you’re going to build one of the homes that we built for $5 million it will cost you around $6.8 million… So, I want to ask applicants to examine this option because not only are we going to do the homes, we’re going to work with the banks… under one big tent and prequalify the homeowners right here so that your loans can be prequalified,” he asserted. (G8)