To increase the supply of safe, affordable, quality student housing in South Africa, particularly for students from low-income households, Proparco today announced a partnership with IFC, the private sector financing arm of the World Bank, Bopa Moruo Private Equity and RMB Ventures.
The four today announced a combined ZAR 516 million (about $36 million) equity investment in Respublica Group to help the company develop high-quality, affordable accommodation for thousands of students, and strengthen its environmental and social standards. Respublica Group owns and operates Respublica Student Living, South Africa’s leading student accommodation provider.
Proparco, IFC and Bopa Moruo Private Equity, jointly with RMB Ventures through Bopa Ventures, will each provide Respublica with equity capital of ZAR 181,500,000 (~US$12 million equivalent), which plans to add almost 5,000 new beds to campuses across South Africa by 2025 and almost 9,000 by 2028, especially to locations reporting the highest demand.
In designing and building new, resource-efficient accommodation, Respublica will be supported by IFC’s Excellence in Design for Greater Efficiencies (EDGE) program. EDGE green buildings certification makes it faster and easier to build and brand more environmentally friendly structures.
South Africa’s student housing market has struggled to keep pace with growing tertiary education enrollment numbers, which have more than doubled since 1994. Students from low-income households are particularly affected by the deficit. Developing affordable student housing in South Africa is, therefore, critical to expanding access to quality tertiary education.
“A partnership with global institutions like IFC and Proparco is an exciting development that provides significant credibility to our business going forward and further reinforces the positive social impact that Respublica contributes toward education and young people in South Africa. Furthermore, our partnership with astute local private equity players like RMB Ventures and Bopa Moruo, allows Respublica to advance its economic transformation and participation goals,” said Craig McMurray, Chief Executive Officer at Respublica Group.
“We are very proud to support Respublica and the development of sustainable student accommodation in South Africa, which is key to inclusive and equal access to higher education in the country,” said Samuel Touboul, Senior Investment Officer at Proparco. “Respublica has an unchallenged role providing housing to South Africa’s young population and supporting their access to higher education and academic excellence. We have full confidence in its talented management and employees to provide high-quality and affordable accommodation services to an ever-greater number of South African students.”
“RMB Ventures and Bopa Moruo are excited to partner with IFC, Proparco and Respublica Group in an investment that not only offers attractive investment features, but one that will also yield substantial positive societal outcomes,” said Eutychus Mbuthia, Lead Transactor at RMB Ventures and Nthime Khoele, co-Managing Partner at Bopa Moruo Private Equity, on behalf of Bopa Ventures. “The mix of local institutional capital, BEE capital, and foreign direct investment capital is ideal for Respublica to help unlock a pipeline of development opportunities to provide quality affordable student housing to an under-served market and growing student population. We have confidence in the management team’s ability to successfully deliver an affordable quality product to the market.”
“Supporting human capital development, including through improved access to student accommodation, is vital to spurring sustainable and inclusive economic growth in South Africa,” said Olaf Schmidt, IFC Manufacturing, Agribusiness and Services Manager for Africa. “Our aim is to ensure that all students in South Africa–particularly underserved students from low-income households–have access to high-quality, safe, affordable housing from which to pursue their studies.”