Sustainable Practices and Financing Solutions for the Nigerian Construction Sector

Sustainable Practices and Financing Solutions for the Nigerian Construction Sector

As Nigeria’s construction and real estate sectors evolve, the call for sustainability has never been louder. At MKH Properties Limited, we believe that sustainable building is not just a trend but a responsibility, a commitment to creating spaces that uplift communities, preserve the environment, and drive economic growth.

With the Nigerian construction industry facing unique challenges, such as high material costs, limited financing, and regulatory gaps, innovative practices and creative funding solutions are crucial for building a greener, more resilient future. Drawing on our experience as a trusted real estate developer, this article examines sustainable practices and financing models that can transform Nigeria’s construction landscape while sharing our journey toward ethical and impactful development.

 

The Imperative for Sustainable Construction in Nigeria

Nigeria’s construction sector is a powerhouse, significantly contributing to the country’s GDP and urban development. Yet, it grapples with inefficiencies, including the use of energy-intensive materials, high waste, and environmental degradation. The sector’s reliance on imported materials strains foreign exchange reserves, while weak regulatory enforcement often sidelines sustainability. These challenges are personal to us at MKH Properties.

Our Chairman, Dr Muibi Kehinde Hammed, has seen firsthand how poorly planned developments could burden communities with flooding and inadequate infrastructure. This inspired our mission to build differently, creating nature-friendly estates and smart buildings that prioritise people and the planet.

Sustainable construction offers a path forward. By adopting energy-efficient designs, renewable materials, and waste-reducing technologies, we can lower costs, enhance property value, and improve quality of life.

 

Sustainable Practices Shaping the Future

At MKH Properties, sustainability is woven into our DNA. Our projects, from commercial estates to affordable housing, reflect practical strategies that others in the industry can adopt:

1. Energy Efficiency and Renewable Integration: We incorporate solar panels and energy-efficient lighting in our developments, reducing reliance on Nigeria’s strained power grid. For example, our smart estate in Lagos features solar-powered streetlights, cutting operational costs for residents. Studies show that energy-efficient buildings can reduce operating costs by up to 30%, boosting long-term affordability.
2. Local and Sustainable Materials: Sourcing materials like locally produced bricks and recycled aggregates minimises environmental impact and supports Nigerian businesses. Our commitment to this practice aligns with global trends toward circular economies, where waste is reused in construction.
3. Smart Technology for Resource Management: We leverage proptech solutions, including smart home devices such as smart doors and AI assistants, to optimise resource use. These innovations enhance sustainability while appealing to tech-savvy investors.
4. Community-Centric Design: Our estates prioritise green spaces, pedestrian-friendly layouts, and access to amenities, fostering social cohesion. We’ve seen how these designs improve mental health and property desirability, creating lasting value for residents.

These practices are ideal and profitable. Our data-driven approach shows that sustainable properties attract premium buyers and tenants, with some estates achieving 20% higher occupancy rates than conventional developments. Yet, scaling these practices across Nigeria demands overcoming financial hurdles.

 

Financing Solutions for a Sustainable Future

Access to finance remains a weak link in Nigeria’s construction industry. With interest rates on the rise, few long-term lending options, and a mortgage system that’s yet to mature, developers face significant roadblocks. But at MKH Properties, we’ve found ways to move forward despite these hurdles. Our CEO, Dr. Muibi, shared some of these strategies during his session at the BusinessDay Sustainable Building Conference 2025, highlighting how more sustainable and structured financing models can empower developers to thrive, even in tough economic conditions.

Here’s what works:

1. Adequate Planning Starts with Equity: Before you start any project, make sure you’ve secured at least 30% equity contribution. This upfront capital gives you a strong foundation and makes it easier to access additional funding.
2. Create Alternative Cash Flow Projects: Don’t rely on one stream. Introduce alternative projects such as sites and services schemes, which can generate revenue to fund your core development without overrelying on loans or unstable income projections.
3. Secure Off-takers: Having committed off-takers, buyers or subscribers who pay a 10–20% deposit, ensures steady cash flow. It also builds confidence with investors and lenders, knowing there’s market demand backing your development.
4. Build a Minimum of Three Financing Options: If you’re relying on a single funding route, you’re setting yourself up for pressure. A minimum of three options (e.g. equity, offtakers, and alternative projects) gives you flexibility and protection against inflation, cost surges, or unforeseen delays. Without this, developers are more likely to cut corners, a dangerous path that often ends in building collapse or project abandonment.
5. Instil the Right Internal Culture: If your internal team accepts money from contractors, it undermines your entire quality control process. This leads to contractors cutting back on material quality to recoup losses, and again, increases the risk of structural failure. At MKH, we enforce zero tolerance for undeclared gifts or bribes. Integrity in procurement is non-negotiable.
6. Focus Resources on One Project at a Time: It’s tempting to juggle multiple developments, but spreading your resources too thin invites shortcuts. It’s better to execute one project excellently than run several poorly-funded ones that compromise on material quality and execution.
7. Hire Competent, Not Just Popular Professionals: A flashy brand name doesn’t always mean quality work. Ensure you’re working with competent hands, not just familiar ones. The right technical team is key to translating sound financing into a safe, lasting structure.

By combining these practices, we’ve learnt how to build beyond inflation and maintain quality without compromising standards. Financing may remain tough, but with the right strategies, it doesn’t have to be a roadblock.

 

Leading by Example

Our journey at MKH Properties reflects the challenges and opportunities of sustainable construction. When we rebranded in 2021, we doubled down on innovation and ethics, aiming to be Africa’s preferred real estate partner. Our flagship project, MKH City, a nature-friendly estate in Ibadan, integrates solar energy and local materials, reducing its carbon footprint compared to traditional developments. This project wasn’t easy-high upfront costs and regulatory delays tested our resolve. But by partnering with local artisans and securing impact investment, we delivered a community that’s both sustainable and profitable.

Dr Muibi’s vision drives this work. “Real estate isn’t just about buildings”, he says. “It’s about legacy, creating spaces where families thrive and the environment flourishes.” This human-centred approach has earned us trust, with over 1,000 clients served and a growing reputation for transparency. Our participation in the Sustainable Building Conference 2025, hosted by BusinessDay, underscores our commitment to thought leadership. We’re honoured to share our insights and learn from global peers.

Nigeria’s construction sector stands at a crossroads. Sustainable practices and innovative financing can unlock its potential, creating jobs, reducing emissions, and improving living standards. But this requires collective effort. Policymakers must prioritise green regulations and incentives. Developers must embrace technology and local resources. Investors must back sustainable projects with patient capital. At MKH Properties, we’re doing our part, building a legacy of trust, innovation, and impact.

Let’s build a Nigeria where every structure tells a story of progress and care.

Join us in this mission, because sustainability isn’t just the future; it’s the foundation of a better today.

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About MKH Properties Limited

A CAC-registered member of REDAN, MKH Properties is a leading Nigerian real estate developer focused on innovative, sustainable, and ethical solutions.

With a diverse portfolio spanning commercial, residential, and smart estates, we’re committed to fostering prosperity and environmental stewardship across West Africa. Learn more at our website www.mkhproperties.com.