National Bank of Kenya (NBK) has stated that it was satisfied with the security presented by a developer who secured a Sh1.9 billion loan for the construction of affordable houses at Jeevanjee Estate in Ngara.
In documents submitted to Nairobi County Assembly Planning Committee, NBK’s Managing Director George Odhiambo said they had every reason to trust the developer based on the requirements that were put in place.
Jabavu Village Limited (JVL) submitted a title deed for the land on which the Nairobi Bachelors Jevanjee Estate Ltd sits following a controversial agreement with Nairobi City County Government that has sparked controversy about questionable transfer of public property into private hands.
The documents show that JVL, who are in possession of the title deed, approached the bank in 2022 for financing to complete the construction of the project on a plot measuring approximately 8.9 acres.
“As part of due diligence, the bank procured the relevant documentation pertaining to the requests and approved the financing request through a stringent credit evaluation credit which included suitability of the business model, contacts with NCCG, the professional team that was undertaking the project, repayment ability and security for the bank,” documents reads.
The bank stated that indeed, the title deed for the Jevanjee estate is among the securities listed by the developer to process the loan.
“The title for property LR 209/5458 in the name of Nairobi Bachelors Jevanjee Estate Ltd was used to secure financing for Jabavu low-cost housing project by Jabavu Village Limited.”
As the result, the bank stated that it approved a construction facility for Sh1.9 billion as per a letter of offer dated December 23, 2022.
According to the bank, the money was to be used for the completion of the project, and that the total amount advanced to the project to date based on two interim architect’s certificates totals to Sh505 million.
The last disbursement made by the bank to the developer was made on March 15, 2024.
Also, the bank stated that it was convinced by the submitted joined agreement between the county and the developer in the name of Nairobi Bachelors Jevanjee Estate Limited, where the country have 200 shares and JVL had 800 shares.
It also submitted that the transfer of the property to the Nairobi Bachelors Jevanjee Estate Limited was registered on July 2019, whereby the facility was handed over to JVL after going through the normal procedures prior to granting facilities.
The bank also availed documents that it relied on in processing the loan for the project. Some of these documents includes application letter, the board resolution, financing documents supporting the borrowing, KYC documents (memorandum and articles of association, IDs, PINs), all relevant regulatory approvals (QS, NCCG, Nema), feasibility study, projects sales report, copy of title deed, project award tender, joint venture agreement and addendum as well as the shareholders’ agreement dated March 12, 2019.
The County Assembly Planning Sectoral Committee raised concern over the Jevanjee and Pangani projects after stalling for the last two years.
Last week, the bank leadership appeared before the planning committee but the Jabavu team failed to honour the invitation.
Some of the committee members, including Minority Leader Anthony Kiragu (Waithaka MCA) and his deputy Waithera Chege (Nairobi South MCA) have alleged the agreement on the Special Purpose Vehicle (SPV) was illegally changed to favour the developer.
“They changed the shareholding of the SPV. It was initially 99/1 in favor of the county and it changed to 800/200 in favor of the developer,” Mr Kiragu told Nation.Africa .
The Planning Committee Chairperson Alvin Olando Palapala who represents the residents of Kitisuru said that the county will not allow public property to be illegally transferred into the hands of private people for the benefit of a few individuals.
Mr Palapala claimed some of the county officials in the last administration and the current leadership of Governor Johnson Sakaja facilitated the questionable transaction.
The investigation is expected to continue this week where the bank will be defending its approval of loans as members of the committee expects answers from Jabavu as well.
The ongoing investigation before the County Assembly has cast doubt on the rest of Governor Sakaja's affordable housing programme, which he is planning to roll out across the country.
The governor announced that his administration would like to construct cheaper houses for its residents in some of the estates, including Bahati Estate (9,000 units), Maringo (4,000 units), Jericho (6,000), Lumumba (4,000), Ziwani (2,500), Bondeni (700), Kariobangi North (2,000), Embakasi (2,500), and Woodley (3,400 units).
