Goh Betoch, Ovid Group pair to erect residential housing worth 1.45 billion birr

Goh Betoch Bank (GBB) and its subsidiary, Goh Property Development and Marketing SC (GPDM) pen a design and build contract with the emerging construction company, Ovid Group to construct residential houses at the cost of 1.45 billion birr.
The financial firm that was formed with the critical aim of anchoring the mortgage sector disclosed that it has rolled out various new schemes as a new actor on the housing industry, which over the past many years had been given the cold shoulder by the financial industry.
During the signing ceremony that was held on Friday May 12, Mulugeta Asmare, President of GBB, said that the new venture pertained a unique partnership that harness the prowess of a developer, financer and contractor which is a new step in the right direction for the housing scheme in Ethiopia.
As Mulugeta highlights, his bank will have multiple roles on the new operation including; providing finance to GPDM and also in facilitating long term loans for customers who are buying house from the developer.
“In addition to that, on behalf of the developer we have taken the responsibility to collect the advance payments from the home buyers and we will channel the funds to the developer as appropriate,” Mulugeta said.
For the new operation, the bank’s president stated that the National Bank of Ethiopia has expressed its unequivocal support towards the project and further explained that the government is closely working with the bank on the new initiative.
“The government has designed a ten year housing development plan to construct 4.4 million houses and of that 80 percent is expected to be developed by the private sector. So if such kinds of initiatives are spearheaded by government, it is more than evident that the government will render its support,” the president added.
As per the deal, the developer will construct 270 houses on 2,851 square meters plot of land that is located around Yoseph Church, Nifas Silk Lafto Sub City.
The contractor is expected to hit the ground running with new technologies and work practice, and is said to accomplish the construction in 18 months once it commences the ground work.
In the project referenced to as ‘project one’, the contractor will be responsible for the handling of the design, which technically has been approved and will supervise the construction of 270 units with one, two and three bedrooms.
Wubishet Jekale, Board Member of GBB and a prominent construction sector expert and professor at Addis Ababa University, said that the three stakeholders were in discussion for about four months to reach at final consensus to strike the deal.
He further explained that the contractor has fully prepared to break the ground and accomplish the project on time with the implantation of new technologies which will catalyze the activity.
Asmare Wale, CEO of Ovid Construction, which is one of the nine companies under the Ovid Group, said that his company has a good reputation when it comes to accomplishing projects on time by introducing new work practices and technologies for the construction industry in Ethiopia.
“We have successfully accomplished and are currently undertaking several projects but that will not fizzle our capacity to handle other big projects such as this one,” the Ovid Construction CEO confidently stated, adding, “We are programmed to carry out more huge projects in our line of work, so we have ample capacity to handle additional projects.”
Asmare said that to attain the project as per the timeframe, they agreed with clients that the contract will apply new technologies and work 24 hours a day, which is not common in the country.

(Photo: Anteneh Aklilu)

Mulugeta said that the new technology that the project will use shall contribute to provide houses at lesser prices besides finishing projects on time.
Regarding the bank capacity to support such huge projects, the president underscored that despite the bank’s primary focus being in the mortgage scene it is also a commercial bank that can mobilize savings from customers, “We will also collect advance payments from home buyers that shall provide big inputs to beef projects.”
The bank has also floated additional two million birr shares to boost its paid up capital by two folds from the current one billion birr of the fully paid capital amount.
“We started the initiative after taking ample preparation so as to have a capacity to mitigate the incoming demand from the market,” the President explained.
Currently, the bank through its subsidiary started the initiative for home buyers to deposit at least 30 percent of the total cost of the house at the construction stage as down payment with the remainder to be paid for up to 30 years.
At the current stage, over 406 home buyers have been registered and are now saving to utilize the new scheme.
Birhanu Assefa, General Manager of GPDM, said that his company is formed on the major pillar to provide houses at reasonable rates. He said that the new project will commence as soon as some paper works are done.
“We are ready on the materials and financial front, and our project is projected to be concluded with the expected cost,” he told Capital.
Birhanu said that the company will consider different approaches to possess plots and expand the housing scheme, “Land is one of the reasons for the price hike on the housing project so the government should also consider providing land at reasonable prices since we are aligned with government policy and supports its vision.”

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