The National Bank of Kenya has defended its decision to issue a Sh1.9 billion loan to Jabavu Village Ltd (JVL) to build affordable housing units at Jeevanjee estate in Ngara, Nairobi.
The bank, in documents provided to the Nairobi County Assembly’s Planning Committee, cited “due diligence” and compliance with regulatory requirements as the reasons for granting the financing.
NBK was confident in the security provided by JVL, which included a title deed for the Jeevanjee Estate property, said managing director, George Odhiambo.
This assurance came amid rising concerns about the controversial transfer of public land to private developers.
Loan security
JVL approached NBK in 2022, offering as security for the loan the title deed for the Jeevanjee Estate land, which is about 8.9 acres.
Documents provided by NBK show the bank conducted a credit evaluation that reviewed the project’s feasibility, JVL’s repayment capability, and other critical factors before approving the financing request.
The bank confirmed that the Jeevanjee title deed was used to secure the Sh1.9 billion loan, which was officially approved on December 23, 2022.
NBK said it has so far disbursed Sh505 million, based on interim certificates from project architects. The most recent disbursement occurred on March 15, 2024.
The bank also presented documents showing that the transfer of the property to Nairobi Bachelors Jeevanjee Estate Ltd, a special-purpose vehicle (SPV), was registered in July 2019.
The SPV’s shareholding structure, initially 99 percent in favour of the county government, had reportedly been altered to 80 percent for JVL and 20 percent for the county, a change that has stirred controversy among ward reps.
Shareholding changes
Planning Committee members, including Minority Leader Anthony Kiragu and his deputy Waithera Chege, have voiced suspicions about irregularities in the shareholding changes.
They allege that certain county officials from the previous and current administrations facilitated the changes, raising concerns about public assets being transferred into private hands.
Nairobi residents would not accept the privatisation of public property, said committee chairperson Alvin Olando Palapala, who pledged that the matter would be thoroughly investigated.
“The county will not allow public property to be illegally transferred for the benefit of a few individuals,” he stated.
The assembly inquiry, which is expected to continue this week, seeks to clarify the bank’s role and the legality of the property transfer. NBK executives have said they will cooperate with the assembly.
But representatives of Jabavu Village have yet to appear before the committee.
