The European Investment Bank is backing Kenya’s first green affordable housing fund with €21.5 million to build energy-efficient homes for low-income families, addressing a crisis where most urban Kenyans live in informal settlements, according to EIB. The IHS Kenya Green Housing Fund is developing three projects in Nairobi with 664 units total, plus 10 more projects planned with over 2,600 units. Construction of the flagship “Muzi Stawi” complex in Garden City is nearly 90% complete and should finish by October 2025.
More than 7 million of Kenya’s 12 million households live in cities, mostly in slums, while only 2% of officially built housing targets lower-income families. Rising housing costs have made decent homes unaffordable for most Kenyans despite growing urban populations. The housing shortage forces families into overcrowded informal settlements that lack basic services like clean water and electricity.
The Muzi Stawi project includes over 200 one- and two-bedroom apartments for rent starting next year.
“We are working with experts, planners and policymakers to improve living conditions, reduce energy costs and support climate-friendly urban growth,” said EIB’s Edward Claessen. IHS Kenya Managing Director Kioi Wambaa said they’re “on track to deliver about 4,000 quality, affordable green homes by 2030” that prove “affordability and excellence can go hand in hand.”
Real estate accounts for about 30% of global greenhouse gas emissions, making green building designs crucial for climate action. The fund’s energy-efficient homes will cut utility costs for residents while reducing environmental impact. Other African investors have also backed the fund with €83.4 million in total commitments.
This initiative shows how international development banks can partner with local companies to tackle housing shortages while advancing climate goals, offering a model that could work across Africa’s rapidly growing cities.
