On November 16, 2022, National Housing Cooperation launched a revised version of its joint venture policy to stimulate the provision of affordable homes in Tanzania.
Public-Private Partnerships (PPN) are mechanisms for governments all over the world to procure and implement public infrastructure or services using the resources and expertise of the private sector.
For years, Tanzania National Housing Corporation has been implementing these joint development real estate projects since 1993, but since 2012 there have been no such projects.
Now with a demand of 3000,000 homes in a year and a shortfall supply of only 200,000, NHC has to revise its strategies to at least cover the shortfall.
According to Mr. Nehemia Mchechu, NHC Director General at the launch, specifically said "we haven't engaged in a joint venture with the private sector in the last 10 years because we wanted to gauge how well the projects we had already entered into with joint ventures were performing.
But what does this NHC New Joint Venture Policy Entails:
1. Land as Equity
in this partnership, NHC will only contribute to the land, and the private partner will be responsible for providing the necessary financing for the completion of the project. After completion, NHC will own 25% of the project, and the percentage will keep increasing to 50% after 10 years and 75 % after 15 years.
2. Land and Finance as Equity
Here NHC will contribute both land and a portion of the financing. Then the new Company will be formed between NHC and the partner (SPV), and the sharing structure will be negotiated between the two companies. For this type of partnership, the project must be worth more than Sh50 billion and have a payback period of 12 years maximum
3. Revenue Sharing Model
NHC and the private partner will construct, market, and then split revenue according to predetermined percentages.
4. Long-term lease
Where NHC leases a plot for an extended period of time. the partner develops and manages the property for a maximum of 30 years, and then the NHC receives the land back,
With this new policy, its definitely clear Investors now have a partner they can rely on on aware as they move to invest in this giant untapped Housing Market in Tanzania.
The Real question here is are normal Tanzanian citizens aware of this NHC Jont Venture Policy and the benefits it brings?
Edited
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Afrocaya
