Irish developer Howard Eurocape and US funding giant MuniMae have teamed up to launch a €780m (£520m) fund to invest in affordable housing schemes in Africa and the Middle East

The fund, called International Housing Solutions, plans to raise €231m (£154m) in equity. It has already secured a €77m (£51m) affordable housing tender from the US government-sponsored agency Overseas Private Investment Corporation. The agency supports US private investment in emerging markets and provides funding to companies that help promote the further economic development of developing countries.

Cathal Conaty, chief executive officer of International Housing Solutions, said the fund would minimise risk by investing in the supply of reasonably priced housing for low and middle-income families. A significant portion of the investments will target South Africa.

The fund will have a 10-year term and is targeting returns of more than 20%.

Local developers will invest equity alongside the fund and split the profits between the fund and the developer.