ZeroWatt Homes signs MOU to provide £500m of Shariah-compliant funding for modular social housing in the UK

Funding for Housing, a not-for-profit social housing funding platform, has signed an MOU with ZeroWatt Homes International Ltd , a privately controlled modular house builder and an innovative provider of green, energy efficient, offsite manufacturing social housing. The aim of this collaboration is to supply a range of specifically designed low-cost homes for the UK social housing rental sector.

The notes aim to raise funds through a Shariah-Compliant issuance with an initial tranche of £500m. The issue is government-backed by the rent support mechanism and CPI-linked. There are plans to upsize the issuance to £1bn within 12 months via two further tranches, subject to investor demand.

The aim of the MOU will be to provide off-balance sheet funding for local authorities – particularly in London – to assist them with social housing development. The UK is currently facing an acute social housing problem, due to a large number of local authorities lacking sufficient funding to meet their building requirements, and this issue is most prominent in the capital.

The MOU will help solve this problem by using 80% of the bond proceeds to construct new social housing stock. The designs for the social housing will be provided by ZWH and mark a first in providing new homes that will be both NdSS & meet projected Future Homes Standards and be virtually energy self-sufficient at a time of soaring energy costs for domestic homes.

The issue will provide up to 30-Year amortising bonds at a rate of benchmark + 200-300bps + UK CPI (capped to 5% per annum), with semi-annual distributions after year 1.

The issuer is supported by Al Waseelah PLC, an award-winning Sukuk issuance programme and Yasaar Limited, one of the world’s leading and oldest Shariah compliance and consultancy service. The issuer is already established and has confirmation of Article 9 status under the EU Taxonomy, putting ESG principles at the heart of its work.

Scott Levy, Founder of Al Waseelah said: “Fixing the social housing crisis requires immediate action from experts who know how to deliver the homes people need. We are very encouraged by our MOU and believe that with the incoming funds, we will be able to provide energy self-sufficient homes at a time when the general public most need it.

Speaking about this launch Majid Dawood, CEO of Yassar Limited said: “Several financial groups have sought to provide alternative funding to fix the issue of social housing in the UK, yet none have managed to combine the capital provision with a supplier of rapidly-deployed OSM homes designed specifically for the social sector.”

The above paragraphs are subject to the disclaimers set out in the listing particulars dated 14 June 2021 in compliance with the Listing Rules of the Frankfurt Stock Exchange (the “Listing Particulars”) and any pricing supplement issued pursuant thereto (“Pricing Supplement”).

Neither this announcement, the Listing Particulars nor any Pricing Supplement constitutes an offer or an invitation to subscribe for or purchase any Notes and should not be considered as a recommendation by the Issuer, the Settlement Agent, the Promoters, the Trustee, or any of them that any recipient of this Listing Particulars or any Pricing Supplement should subscribe for or purchase any Notes. Each recipient of this Announcement, the Listing Particulars or any Pricing Supplement shall be taken to have made its own investigation and appraisal of the condition (financial or otherwise) of the Issuer.

This announcement does not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law.  An offer or solicitation will be made only through an investment memorandum and other related documents with respect to a particular investment opportunity, and will be subject to the terms and conditions contained in such documents.