The two entities have formed a new company, on a 50-50 ownership basis, which will undertake the project that will be partly funded by the International Finance Corporation, the World Bank’s private lending arm.
IFC, which plans to fund the project to the tune of Sh4 billion, has hailed the development as a great initiative that will help reduce the deficit in affordable student accommodation.
“[This] will be a big step towards reducing the deficit in affordable accommodation for those in tertiary institutions and those newly out of college but cannot afford to buy properties of their own,” IFC said.
The first bunch of hostels will be built nearby Strathmore, USIU-Africa and Daystar universities where the investors have acquired parcels of land for the project.
The development comes at a time when local universities are contending with an acute shortage of student accommodation that has been caused by several factors including conversion of a number of middle-level colleges with little infrastructure into universities.
A double intake policy for public institutions aimed at delinking admissions from bed space has raised the total number of students from 251,196 in 2013 to 564,507 this year, according to the Economic Survey 2017 –further worsening the accommodation crises.
To solve the issue, several universities have engaged private investors to build hostels for their students in a Public Private Partnership (PPP) model where the investors will manage the facilities for several years to recoup their investments before transferring the hostels to the university.
Kenyatta University has, for example, signed a deal with New-York based private firm Africa Integras for the construction of a 10,000-capacity student hostel at the university’s main campus in Kahawa, Nairobi.
The project that will cost an estimated Sh5.1 billion is the biggest development to be completed under the PPP model since it was entrenched into law in 2013.