The state-owned Home Ownership Providing Energy Inc. (HOPE Inc.) has not shown it can build houses in a cost-effective, efficient and timely manner, and now finds itself in a “precarious financial position”.
That is the conclusion of a Special Audit on the Building Programmes of the Home Ownership Providing Energy Inc. conducted by the Auditor General, who is recommending that the company come up with
a comprehensive plan “to determine how many houses can feasibly be built by HOPE Inc.”.
However, in a detailed response published in the special audit report, which was laid in Parliament recently, the company said its new leadership was implementing strategic changes and addressing the concerns which it acknowledged were “clear shortcomings in the initial operations of HOPE”.
Having borrowed $40 million from the Housing Credit Fund (HCF) to finance the development of lower-income housing solutions and $27.27 million from HCF to help provide pre-fabricated hardwood houses from a Guyana company and procurement infrastructural services, HOPE Inc. also “is currently servicing the said loans and is not in breach of any of its obligations to HCF”.
The Auditor General’s findings are contained in a 74-page report dated April 2, 2025, and are based on an investigation which sought to assess whether value for money was being achieved for the funds expended by HOPE Inc.
The special audit covered the period November 2020 to December 2024 “to determine whether the housing programmes and the energy generation aspect of HOPE Inc.’s operations were being executed in a cost-effective, efficient and timely manner”.
“HOPE Inc. thus far has not demonstrated that it is able to build houses in a cost-effective, efficient and timely manner,” the Auditor General concluded.
“A key feature in HOPE Inc.’s model was that it would allow subsidised housing for low- and middle-income persons, through the use of revenue streams generated by photovoltaic systems. This, however, has not been achieved to date.
“In addition, HOPE Inc. has been selling houses at less than the cost to build and this has eroded its capital base. Hence, HOPE Inc. finds itself in a precarious financial position, without the means to continue its work while simultaneously paying its debt obligations, unless there is further capital injection or delaying of debt payments. The model established has therefore not been successfully implemented.”
The Auditor General also said that with HOPE Inc. having a mandate to build 2 000 houses annually, it needed a comprehensive plan to overcome several challenges, including those related to land availability, financing, availability of suitable contractors, the willingness of lending agencies to participate in the programmes, and adequate project management, all of which would impact the capacity of HOPE Inc.
“. . . If HOPE Inc. is to sell houses at subsidised cost, it will be challenging to operate without budget support from the Government as no profits would have been made to defray these costs.
“It is therefore important that HOPE Inc. establishes a credible financial plan for financing its objectives. The Auditor General’s Office has not been provided with this plan to date.”
In its March 25, 2025 response to the Auditor General, HOPE Inc. said that “with the new leadership along with the implementation of strategic changes within HOPE, the public can be assured that HOPE is actively addressing these concerns.
“While the model for subsidising housing through renewable energy revenue has not as yet been implemented, HOPE, Hope PV and the Government are committed to revising our approach to ensure its effectiveness moving forward,” it said.
“This, added to HOPE’s commitment to revising its approach to ensure effectiveness moving forward, and the importance of developing a comprehensive plan that encompasses land availability financing and contractor management as essential components for HOPE shall all work to ensure HOPE’s future success.”
The company said that it repaid $4 million of the $40 million loan to the HCF and that another $1.13 million was due at March 31.
HOPE Inc. said it had drawn down about $21 million of the $27.27 million loan at March 24, and that based on the terms and conditions of the loan, “neither interest nor principal repayments are due as yet”.
The company told the Auditor General it accepted that its previous board and management, “though accustomed to managing smaller-scale projects, lacked the experience required to oversee the complexities of transitioning to the construction of much larger numbers”.
HOPE Inc. said that its new leadership had reduced annual operating costs by about $720 000 mainly through cutting nine staff members and lowering rent and utilities by relocating the offices.
