The city government of Addis Ababa in Ethiopia said this week that it had reached an agreement with a South African developer to build 500,000 affordable homes in the city, the Ethiopian News Agency reports.

The $4.2bn deal with Bloemfontein-based company, Property 2000, is for 100,000 homes a year for five years. Low-income residents will be able to buy them with low-interest mortgages with 20-year terms.

Some 650,000 people have reportedly added their names to the housing waiting list.  

Adanech Abiebie, Addis Ababa’s deputy mayor, said the city was working to build over 1 million houses in the capital, and the Property 2000 deal was part of this plan, which is backed by the United Arab Emirates.

She added that the city would develop the plan using public–private partnership, with Property 2000 providing finance for the housing and the city government the land. According to reports in the Ethiopian media, the land will be allocated near the city’s Ethio ICT Park.

Napo Eddie Modise, chairman of Property  2000, said his company would complete the homes as quickly as possible, and that 90% of the construction jobs created would go to Ethiopian workers.