Kampala, Uganda – By Financing 70% of the Church House project, Equity Bank was looking at a unique model that would enable the Church of Uganda share in the revenue that would be realized from the property while the loan is being repaid, Dr. James Mwangi, the CEO and Managing Director of Equity Bank has said.
“What is so special about this project is that the church is also participating not just in offering land that it has held for 50 years, but by contributing 30%. If it was 100% financed by the bank on a loan, the sense of ownership would be weak,” he said.
To raise the 30% financing, the dioceses under the Province of the Church of Uganda began selling their unutilized land in Kampala and in their Dioceses and bought shares in the Church House.
“The way this project was designed is that if we complete in December and in January we have tenants, we’ll be sharing almost equally the rental income. The Church will be taking about 45% of the income and Equity Bank takes the rest. This will be for only a period of 10 years then the Church takes over,” Mwangi explained.
The loan from Equity Bank had a two-year grace period, during which time the Church of Uganda paid only the interest on the loan. The balance of the loan will be repaid over a ten-year period using income received from tenants.
Dr. Mwangi was speaking during the opening of the 22nd Provincial Assembly of the Church of Uganda at the Uganda Christian University, Mukono recently.
He told the gathering of Bishops that there had been various challenges during construction process but that these hiccups have brought forth invaluable knowledge that will be vital going forward.
Having commenced construction of Church House in December 2010, the project temporarily stalled during 2013 due to a conflict between two parties involved in the construction. The conflict was successfully resolved and construction was re-started in July 2014.
“I know there has been a lot of anxiety; when are completing the project, how are we managing the project. In the words of Archbishop Henry Luke Orombi, ‘This was a dream that the church had cherished for nearly 50 years.’ I am glad that in just four years, this dream is becoming a reality,” he explained.
Mwangi concluded his speech by extending an invitation to the rest of dioceses to choose Equity Bank’s model of development so as to enable their followers lead a better livelihood.
“If we can actualize a dream of $16m together, why can’t we help our followers and our members in our parishes also realize their dreams? Remember villages are a creation of the aggregate of the villagers’ achievements.
“We can choose to make our church great by helping our followers achieve their personal dreams. Their dreams may not be as big as Church House, but may be as simple as getting a better education for their children. I want to appeal to you; you may not be bankers, that is why we are here. If you raised your hands to the Lord, then we will win in empowering your followers,” he noted.
In response, Bishop Stanley Ntagali, the Archbishop Church of Uganda told the gathering that they had already received inquiries from several persons interested in occupying the building.
“There is a growing list of quality tenants who are interested in renting space in Church House.I am happy that Equity Bank will be the first tenant,” he said amidst cheers from the Assembly of Bishops.
The Church House project estimated to cost $16m will house commercial banks, shops and offices, to generate money for the church. With Equity Bank financing 70% of the project through a syndicated loan and the church financing 30%, the building next to Crane Chambers is expected to be completed early next year.
Plans for Church House as a commercial real estate enterprise were first drawn up by the Provincial Assembly in 1966 but stalled for various reasons for the next 45 years. However, it is expected that by 2015, Church House will be fully operational at 16 levels.
The original proposed site for Church House was on Shimoni Road. Since, the Bank of Uganda, however, proposed to take over the Shimoni Road site, that property was exchanged for Plot 34 on Kampala Road in 1972. Church House Company was registered in 1971 as a Private Limited Company.