Climate Resilient and Energy Efficient Social Housing
Climate Resilient and Energy Efficient Social Housing
Business Model Description
Build climate resilient and energy efficient social housing units for low-income households, including those deemed eligible by the Housing Division of the Ministry of Housing and Land Use Planning (MHLUP) with respect to household incomes of up to MUR 30,000 (USD 681). Rehabilitate existing social housing estates as part of national smart city efforts, which foresee the integration of ICT infrastructure and clean technology in an urban setting with the aim of cost-effective power supply, waste reduction and effective resource management.
Expected Impact
Provide access to adequate housing that will improve the living conditions particularly of low-income communities, with smart technologies working towards minimizing the environmental footprint of social housing.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Mauritius: Countrywide
Sector Classification
Infrastructure
Development need
Mauritius' fiscal leeway for infrastructural resilience risks falling short in addressing a multitude of climate-change related shocks (e.g., heavy rainfall, sea-level rise). Utility of country's unique marine assets and scarce water resources is menaced by inadequate industrial and domestic wastewater treatment, wide-spread water leakages and lack of storage facilities (1, 2).
Policy priority
Government of Mauritius allocated 40% of 2021/22 Budget, accounting to some USD 1.5 billion, for infrastructure development, including drainage and social housing projects, which is critical for Mauritius's objective of becoming a high-income country (HIC) (3, 42). USD 527 million financial assistance was received from the Indian government for the Metro Express project (43).
Gender inequalities and marginalization issues
In the context of Small Island Developing States (SIDS), application of circular economy principles and upgrading local infrastructure, especially in healthcare and education, are crucial for an ageing population with specialized needs and opportunities for youth and women (10, 41).
Investment opportunities introduction
For 2021-2022, MUR 2.8 billion (USD 62 million) are earmarked to infrastructure as part of the economic recovery program (3). The Government plans to invest MUR 190 billion (USD 4.3 billion) in social and economic infrastructure until 2026 (4). To stimulate private investment in infrastructure, 34 projects worth USD 1.5 billion are in the pipeline (5).
Key bottlenecks introduction
Being an island, Mauritius has limited land space, which experiences a strong competition between agricultural sector and private promoters (1), leaving little space for the development of infrastructure. Scale impedes profitable investments in circularity as waste segregation is limited and there is insufficient waste for closed loop (6).
Real Estate
Development need
In Mauritius, 40.2% of the population live in urban areas and cities and no extensive slums exist (7, 8). Due to the lack of new subsidized housing units, low-income families struggle to find affordable housing units for renting or buying. In 2020, more than 25,000 applicants were on the waitlist for social housing (9).
Policy priority
The government prioritizes equal access to decent housing units for every family in Mauritius. In the 2021-2022 Budget, MUR 12 billion (USD 270 million) was allocated for the construction of 12,000 social housing units over the next 3 years. The construction of 2,025 social housing units will start between 2021 and 2022 (3).
Gender inequalities and marginalization issues
Equal access to adequate housing and equal property rights are prerequisite for gender equality. Women are in need of renting or buying social housing more than men in Mauritius because of their low income level (40).
Investment opportunities introduction
The government's smart city projects, national policies on access to affordable housing units for every Mauritius family, and demand for social housing estates create investment opportunities. From 2015 to 2020, demand for social housing units increased by 54% (9).
Key bottlenecks introduction
Increased construction costs, increased housing prices due to foreign investors demand, lack of clear social housing strategy, lack of land use policy, delays on updating social housing units waitlists, and lack of proper monitoring and evaluation mechanism for social housing units are the key bottlenecks (9).
Home Builders
Pipeline Opportunity
Climate Resilient and Energy Efficient Social Housing
Build climate resilient and energy efficient social housing units for low-income households, including those deemed eligible by the Housing Division of the Ministry of Housing and Land Use Planning (MHLUP) with respect to household incomes of up to MUR 30,000 (USD 681). Rehabilitate existing social housing estates as part of national smart city efforts, which foresee the integration of ICT infrastructure and clean technology in an urban setting with the aim of cost-effective power supply, waste reduction and effective resource management.
Business Case
Market Size and Environment
> USD 1 billion
Social housing deficit of 25,000 in 2020
In 2020, 25,500 Mauritians attempted to access social housing. 3,400 households have been waiting for more than 20 years to benefit from social housing (9). The Marshall Plan 2017 targeted the construction of 10.000 social housing units until 2019; from 2017 to 2021, 210 units have been constructed (35, 44).
Social housing made up 18% of the 2021-22 Budget at MUR 12 billion (USD 270 million) (18). In the 2015-2016 Budget, MUR 120 billion (USD 3.2 billion) was allocated for the construction of 13 megaprojects, 8 of which are smart cities (3).
Between 2015 and 2020, the Ministry of Housing and Land Use Planning (MHLUP) through the National Housing Development Corporation Ltd. (NHDC Ltd) spent around MUR 3.36 billion (USD 82 million) for the construction of social housing estates (9).
Indicative Return
20% - 25%
The International Housing Solution (IHS) South African Workforce Housing Fund (SAWHF)'s investments in energy-efficient and affordable low- and middle-income family housing in South Africa achieved an IRR of 23.3%. The Fund aims to expand in Sub-Saharan Africa, including in Mauritius (38).
Investment Timeframe
Medium Term (5–10 years)
The International Housing Solution (IHS) South African Workforce Housing Fund (SAWHF) made an exit from its affordable green housing investments in 9 years (38). The Fund aims to expand in Sub-Saharan Africa, including Mauritius.
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
40.2% of the population lives in urban areas and cities in Mauritius (7). Due to land scarcity, controlling urban extension and sustainable land use is vital in Mauritius; the country has a negative urbanization rate of -0.01% (18).
Mauritius suffers from a social housing deficit. In 2020, more than 25,500 applicants attempted to access units, and 3,400 households have waited for more than 20 years to benefit from social housing (9).
Mauritius' infrastructure is vulnerable to climate change induced shocks, including flash floods, requiring climate-resilient building designs.
Gender & Marginalisation
In 2017, 15.9% of households headed by females lived under the poverty line compared to 7.6% of households headed by men (40), which shows the higher need for social housing.
For the eradication of gender inequality, equal access to adequate housing and equal property rights are essential but women's participation in the decision-making process of urban planning are very low (29, 10).
Expected Development Outcome
Social housing projects enable access to decent housing for all, contributing to efforts around poverty eradication, providing equal opportunities, and ensuring social cohesion, inclusion and justice in Mauritius (3).
Climate resilient and energy efficient social housing units will improve the overall life quality in Mauritius and reduce the national environmental footprint through streamlining green building design practices, contributing to the objective of reaching 35% of renewable energy by 2030 (2, 35).
Gender & Marginalisation
Women will benefit from the development of social housing and smart city projects, via enhanced access to urban residence, which can lead to increased autonomy (29).
Primary SDGs addressed
11.3.1 Ratio of land consumption rate to population growth rate
11.1.1 Proportion of urban population living in informal, informal settlements or inadequate housing
Population growth rate: 0.2 % in 2020 (7). Built up areas: 27,7% in 2005 (24).
3.6% in 2011, at the date of last Housing and Population Census (HPC) (26).
The government aims to maintain and expand forest cover in Mauritius island to 52,290 ha by 2030 and afforestation of 5,000 ha of ex-sugar cane land between 2021 and 2050 (27).
According to national position, as stated in VNR, a Social Housing scheme is in place to reduce the number of those living in inadequate housing (1).
1.2.1 Proportion of population living below the national poverty line, by sex and age
In 2017, 10.4% of the population, (9.7% of males and 11.1% of females) lived below the poverty line (25).
Based on household survey data, a Relative Poverty Line (RPL) is derived to assess the poverty situation in the country without a pre-defined target in the Voluntary National Review (VNR) (25).
9.4.1 CO2 emission per unit of value added
CO2 emissions per MUR 100,000 (USD 2,325) GDP were 116,000 tons (26).
The government targets to reduce greenhouse gas emissions by 30% in 2030 (28).
Secondary SDGs addressed
Directly impacted stakeholders
People
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Outcome Risks
If not managed carefully, social housing units can result in land degradation and deforestation because of enhanced urbanization and extensive construction.
The construction of social housing units and materials used for smart features, can result in significant releases of hazardous waste into the environment and CO2 into the atmosphere.
Social housing projects with smart features can result in privacy concerns (30) and result in data misuse (31).
Impact Risks
Incorporating smart features and green building components in social housing may increase construction and per-unit costs, potentially leading to the exclusion of lower-income population.
To achieve high impact, climate resilience through infrastructural development and efficient use of energy, water and building materials should be locked into investor's business model.
Discontinuation of environmental or social housing policies, and changes in government or international commitments in such projects may undermine the ability to deliver impact at scale.
Impact Classification
What
Climate resilient and energy efficient social housing addresses income disparities in access to accommodation, reducing inequality. Smart technologies work towards minimizing the per unit environmental footprint of social housing.
Risk
The incorporation of smart technologies may lead to affordability issues. Environmental impact may not be delivered at scale if climate resilience is not locked into the business model.
Contribution
Alongside the energy efficiency benefits of building climate resilient social housing units, access to adequate housing is increased for lower-income groups.
Impact Thesis
Provide access to adequate housing that will improve the living conditions particularly of low-income communities, with smart technologies working towards minimizing the environmental footprint of social housing.
Enabling Environment
Policy Environment
Budget Speech 2021-2022: States the Mauritius government's proposed spending and expenditure for welfare of the country. The budget highlights the Home Ownership Refund Scheme and construction of additional 12,000 social units over the next 3 years (3).
National Development Strategy (NDS), 2003: States a 20-year vision and strategy for economic growth and provides the necessary foundation for land use planning in Mauritius (33).
Three-Year Strategic Plan, 2018/19 - 2020/21: Releases the Mauritius government strategy for economic and social prosperity. Giving a boost to the Social Housing Programme is part of the strategic plan (34).
Smart City Scheme Guidelines, 2020: Provides guidance for investors who seek to invest in smart city projects in Mauritius. The document states objectives, obligations and incentives for smart city projects (32).
Marshall Plan, 2016: Aims to fight against poverty and social exclusion. The document recommends developing a 15-year housing strategy that includes social housing to the Mauritius government (35).
Financial Environment
Financial incentives: A USD 190 million line of credit (LOC) from India to Mauritius is issued through Export Import (EXIM) Bank of India and State Bank of Mauritius (SBM). Respectively, USD 45 under the LOC are allocated for the construction of 956 social housing units (39).
Fiscal incentives: Smart city companies and developers are land transfer tax, registration duty fee and morcellement tax exempt. They also benefit from a eight years tax holidays (32).
Other incentives: The Roof Slab Grant Scheme encourages self-help for the construction of housing units by very low to low-income families owning a plot of land. For the period 2017-2018, it provided roof slabs to 1090 families and the Government disbursed MUR 66 million (USD 1.5 million) (13, 21).
Regulatory Environment
Economic Development Board (Smart City Scheme) Regulations, 2015: Promotes the construction of smart cities across Mauritius. The smart cities will include residential, business, and entertainment facilities that are sustainable and energy-efficient (32).
Planning and Development Act, 2004: Aims at coordinating the development of land, the ecological sustainability of land, and the use of public lands in defining the powers and duties of the Minister and establishing the National Planning and Development Commission (36).
Town and Country Planning Act, 1954: Revised in 1990, it establishes Town and Country Planning Board. The Act provides the basis for the policies for the orderly and planned development of land in Mauritius (37).
Economic Development Board (Smart City Scheme) Regulations, 2015: Provide for the procedures to be followed by promoters investing in smart cities (32).
Marketplace Participants
Private Sector
Medine, ENL Ltd, Omnicane Group, Terragri Ltd, Trimetys Ltd.
Government
National Housing Development Corporation Ltd. (NHDC), Ministry of Housing and Land Use Planning (MHLUP), Real Estate Agent Authority (REAA), Mauritius Housing Company Ltd, Mauritius Housing Corporation, MSSNS (Social Integration Division).
Multilaterals
United Nations Development Programme (UNDP), UN Habitat.
Non-Profit
Government of India, ATD Fourth World, National Empowerment Foundation (NEF), National Social Inclusion Foundation (NSIF).
Target Locations
Mauritius: Countrywide
References
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