Capital Investment

Institutional Investment

 

The Social Housing Investment Programme may invest in social housing projects or social housing institutions (SHIs) in accordance with the investment criteria set out in the social housing Regulations. Capital investment is made through Restructuring Capital Grants, Provincial Institutional Subsidies, and Debt Funding. There are instances where delivery agents are able to contribute their own equity, or may secure donor funds.

Restructuring Capital Grant

The primary purpose of the social housing Restructuring Capital Grant is to contribute towards spatial, social and economic restructuring of South African cities. It is a significant contribution to the capital cost of a Social Housing Project, contributing to the delivery of viable, feasible, and sustainable Social Housing Projects that provide affordable rental housing to the poor.

Delivery agents

All delivery agents shall have provisional or full accreditation status, and shall comprise,

Delivery agents shall exclude a provincial government or  municipalities.

Restructuring Capital Grant (RCG) Quantum

Application Procedures

Specific Investment Criteria

The project must

Other Funding

Provincial Institutional Subsidies

The confirmation of the allocation of Provincial institutional subsidies to a project is a pre-condition to the submission of a RCG application. On approval of the grant, it is a condition of Financial Closure that the delivery agent enters into a contract agreement with the Province for the subsidies. The subsidy agreement shall be concluded on the standard terms and conditions of the Department of Human Settlements at the quantum determined by the province taking into account the provisions of the Housing Code and any national and/or provincial adjustments for local conditions.

The SHRA will enter into cooperative arrangements with the province for the disbursement of State funds to meet the financial expenditure targets of both parties.

The province will undertake its own inspections as the project proceeds to determine compliance by the delivery agent of its contractual obligations in terms of the subsidy agreement.

Debt Funding

The confirmation of the approval in principle of a debt funding arrangement by an approved Financial Service Provider for a project is a pre-condition to the submission of a RCG application. On approval of the grant, it is a condition of Financial Closure that the delivery agent enters into a contract agreement with the Financial Service Provider for the required loan to cover the balance of funds for the project after taking into account the State grants and subsidies. The debt funding agreement shall be concluded on terms and conditions that are acceptable to the SHRA.

Own Equity And/Or Donations

In certain circumstances, the delivery agent may contribute its own equity to the project or obtain donations to the project. This additional source of funding is welcomed and is acceptable to the SHRA. These sources of funding are to be declared at grant application stage, and are to be included in the financial viability to demonstrate the reduction in debt financing.