XSML finances land development in Congo


September 26, 2014

Today, XSML, the fund manager active in Central Africa, announced its investment in Manoah Investments SARL based in Lubumbashi, DRC. The investment by XSML will be used to develop plots of land for residential use in Lubumbashi. Manoah Investments is active in meat processing and owns a bakery in Lubumbashi, Katanga.

 

Kinshasa, Democratic Republic of Congo

Lubumbashi, the capital of Katanga province is experiencing significant demographic & economic growth due to the resumption of the mining sector.  The UN estimates that by 2020 the population of the city will have doubled to some 5 million inhabitants. The existing housing infrastructure is insufficient to support this growth and currently very few housing developments projects exist in DRC due to a lack of resources and the long term nature of housing projects. The private sector can play an important role in providing adequate housing to the growing population.

Manoah Investments Sarl will start a development project by creating plots of land  with a basic infrastructure, connected to water, electricity and a sewage system. Families can buy these plots of land and build their own house.  As a pilot project, the aim is to replicate this at a larger scale in the Lubumbashi area.  At a later stage, families will also be offered the option to buy a complete house. The main obstacle for home-ownership remains access to finance, as mortgages with medium to long tenor are currently not available in Congo. The involvement of Manoah Investments Sarl in the construction of houses for its employees triggered the idea to start the housing development activity. Manoah Investments will take a step-by-step approach, in line with market developments.

The Managing Director of Manoah, Stone Kumbi states: “We want to demonstrate that affordable housing with good quality infrastructure is possible in Congo. With this pilot project Manoah builds a small community which shares water, electricity, access roads and sewage. As we have built houses for our own employees we understand the difference a good quality house can make in the lives of people.”

Jarl Heijstee, Managing Partner at XSML says: “With a fast growing young population there is large pent-up demand for affordable housing. This land development project is one of the first of its kind in Congo, providing plots of land with basic infrastructure in place. Future residents will benefit from direct access to electricity, water and a sewage system, which, they would otherwise have to build themselves at a much higher cost and with a longer lead time.”

Manoah is the twenty fifth investment made by CASF and its twenty second investment in DRC. CASF is an investment fund investing in small and medium-sized enterprises in the Democratic Republic of Congo and the Central African Republic. The fund is based on the belief that sustainable economic development in the fast growing markets of DRC and CAR can be achieved by encouraging entrepreneurship. Currently, many opportunities in these countries remain unexploited due to the lack of risk capital and support.  By stimulating entrepreneurial endeavors, jobs and income are created. CASF is a USD 19m fund with 80% allocation to DRC and 20% in CAR. CASF provides risk capital with an investment size ranging from USD 100,000 to a maximum of USD 500,000. Investors in CASF are IFC, FMO and the Lundin Foundation.

About Manoah Investments SARL

Manoah Investments is a meat processing company based in Lubumbashi, Katanga province, DRC. Manaoh is the largest provider of meat products in Katanga province selling to supermarkets, mining companies and through its own retail shops in Lubumbashi. In addition Manoah Investments has a bakery providing bread to the population of Lubumbashi.

 

About XSML

XSML is an independent private equity fund manager, founded in 2008, with a focus on frontier markets. While building and managing funds for these markets, XSML, eXtra Small Medium Large, aims to help grow small businesses into medium and large enterprises. XSML was founded in 2008. The managing partners have an extensive background in emerging markets in the areas of asset management, corporate and development banking and corporate restructuring. Our experience has shown that demand for finance from small and medium sized enterprises (SMEs) remains largely untapped despite increased interest in frontier markets from international investors. XSML bridges this gap between international investors and SMEs in these markets. XSML is currently fund-raising its second fund: the African Rivers Fund.