National Bank defends Sh1.9bn loan to Jevanjee Estate developer, says due diligence done
By Maureen Kinyanjui |
The bank, in its submission to the Nairobi County Assembly Planning Committee, cited "due diligence" and compliance with regulatory requirements as reasons for granting the financing.
The National Bank of Kenya (NBK) has defended its decision to issue a Sh1.9 billion loan to Jabavu Village Limited (JVL) for the construction of affordable housing units at Jevanjee Estate, Ngara, Nairobi.
The bank, in its submission to the Nairobi County Assembly Planning Committee, cited "due diligence" and compliance with regulatory requirements as reasons for granting the financing.
The bank's managing director, George Odhiambo, stated that NBK was confident in the security provided by JVL, which included a title deed for the Jevanjee Estate property.
This assurance came amidst rising concerns over the controversial transfer of public land to private developers.
JVL, the developer approached NBK in 2022, offering the title deed for the Jevanjee Estate, covering approximately 8.9 acres, as security for the loan.
Credit evaluation
According to documents presented by NBK, the bank conducted a comprehensive 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 Jevanjee title deed was indeed used to secure the Sh1.9 billion loan, which was officially approved on December 23, 2022.
A view of the construction of affordable housing units at Jevanjee Estate, Ngara, Nairobi. (Photo: Maureen Kinyanjui)
NBK noted that, to date, it has disbursed Sh505 million based on interim certificates from project architects. The most recent disbursement occurred on March 15, 2024.
National Bank also presented documentation showing that the property transfer to Nairobi Bachelors Jevanjee Estate Limited, a Special Purpose Vehicle (SPV), was registered in July 2019.
The SPV's shareholding structure, initially 99 per cent in favour of the county government, had reportedly been altered to 80 per cent for JVL and 20 per cent for the county, a change that has stirred controversy among Nairobi County Assembly members.
Assembly Planning Committee members, including Minority Leader Anthony Kiragu and his deputy Waithera Chege, have voiced suspicions of irregularities in the SPV's shareholding changes.
They allege that certain county officials from both the previous and current administrations facilitated the shift, raising concerns about public assets being transferred into private hands.
Committee Chairperson Alvin Olando Palapala noted that Nairobi residents would not stand for the privatization of public property, stressing 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 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 committed to cooperating, although representatives from Jabavu Village Limited have yet to appear before the committee.
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