In 2011, OPIC provided a $1.9 million loan to Broad Cove Ecohomes, Liberia, the U.S. developer of middle-income homes in Liberia, where years of civil war had resulted in a wave of migration to the capital city of Monrovia, and left a severe shortage of affordable housing. In addition to its plans to build 80 single-family homes and adjacent community facilities, Broad Cove is using renewable building materials and sustainable development practices and employing local workers in well-paying jobs that provide benefits.
Broad Cove’s attention to all of these details helped the project earn the highest score on OPIC’s development matrix, among all of the projects the agency funded in fiscal year 2011. While OPIC carefully reviews all proposed projects and only supports those determined to deliver a strong development impact, Broad Cove, with its particularly high developmental score, serves as a paradigm of the sort of project OPIC supports and its extensive, comprehensive review of all proposed projects. (Stay tuned for a look at the highest-scoring project of fiscal year 2012, which ends September 30.)
Broad Cove Ecohomes, Liberia, is a subsidiary of Boston-Based Broad Cove Partners, which builds housing in frontier markets, often in Africa. The company was invited by the Liberian National Housing Authority (NHA) to submit a proposal for affordable housing and eventually reached an agreement to develop a 300-acre parcel of land with 1,200 single-family homes on the main highway between Monrovia and Roberts International Airport outside of the city. OPIC’s investment is helping support the first phase of that project, consisting of about 80 basic homes at prices ranging from $25,000 to $30,000.
The key way that Broad Cove delivers a developmental benefit is by building affordable homes in a region where such housing is virtually nonexistent. Liberia’s capital city of Monrovia has an estimated population of more than one million people, but an infrastructure that was built to accommodate fewer than half that number. There has been no development of a significant scale in 20 years, and over that time, the existing stock of housing has deteriorated. Landlords often charge exorbitant rates for unhealthy slums.
While housing projects are, by definition, developmental, the high score that the Broad Cove project earned also reflected some other details including:
Host Country Impact – Liberia is a low income country with gross national income of just $240 per capita that stands to benefit significantly from development.
Human Capacity Building – The Broad Cove project is expected to create about 29 permanent jobs by the fifth year and many of these employees will receive formal training.
Private Sector Development – Eighty percent of initial project funds are expected to be used to purchase goods and services from local businesses, which will stimulate the local economy.
Leveraging Impacts – While OPIC’s loan will account for 65.5 percent of the initial project investment, the remainder will be financed by U.S. investor equity, which will advance OPIC’s mission of catalyzing private sector investment.
Social Effects – Broad Cove Ecohomes Liberia has an equal employment opportunity policy that will cover race, color, religion, social origin, gender political opinion, national extraction and ethnicity. It also provides multiple benefits for female employees, including child care, maternity leave, family leave and non-harassment policies. And the project will provide recreational facilities, schools and medical clinics to residents of the community.
Environmental Preservation – The homes are being built with renewable and locally-sourced materials such as bamboo, clay tiles, sustainably harvested timber, and bricks made from compressed earth and cement which will keep the houses naturally cool. The project also incorporates solar power systems and is exploring the possibility of using recycled rainwater.
Broad Cove also plans to set up a micro power grid for the housing development, which residents can tap into for a fee. They also plan to drill boreholes not the ground and install water wells on the premises.
OPIC first created its development matrix ten years ago as a way to ensure that every project it supported advanced the agency’s mission of delivering developmental benefits in emerging markets. The matrix – which has been refined in recent years – is a sophisticated measurement tool that scores projects in multiple areas including job creation and equal employment opportunity, private sector development, resource leveraging, social effects and infrastructure improvements. Scores are also adjusted to account for the GDP of the host country, to help ensure that more investment funds are steered to the world’s poorest countries.