This series provides a deep dive into selected securitization transactions, including why a securitization was used, how the securitization was structured, and lessons learned, including those related to using securitization to finance the climate agenda.
South Africa: Financing Inner-City Affordable Housing
Expanding access to affordable housing is a key sustainable development goal. The award-winning Urban Ubomi I securitization is helping to achieve that in inner-city housing in Johannesburg through a series of social bonds issued in 2021 and 2022 for ZAR609 million and ZAR440 million, respectively. The bonds are securitizations based on mortgages to property developers and the first social bonds listed on the Johannesburg Stock Exchange’s Sustainability Segment. The originator, TUHF Ltd., is a specialized company that finances entrepreneurs that buy and refurbish rental properties in inner cities. To quote the JSE: “It is encouraging and inspiring to see South African businesses taking the Sustainable Development Goals (SDGs) to heart… [We] are excited to list our first Social Bonds that will enable TUHF … to drive sustainable development through the provision of affordable housing and improved access to funding for property SMMEs and entrepreneurs.”
Ghana’s Daakye Bond Program to Fund Education Priorities
In line with Goal 4 of the Sustainable Development Goals, Ghana’s Daakye bond program securitizes an education-dedicated value-added tax levy to raise funding to both refinance previous debt obligations and accelerate the build-out of classrooms to meet national education policy priorities. Through June 2021, with both 7-year and 10-year bond issuances, the Daakye program has raised almost GHS 2 billion (or roughly US$330 million) out of a GHS 5.5 billion program. This Milken Institute workshop explored how the securitization was designed—and included a discussion of Ghana’s earlier ESLA model on which it is based—and also highlighted the securitization's structure, the stakeholders involved, the impact to-date, and potential lessons that other countries might apply when developing similar structures.
