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Date
: 13/01/2003
Source: Ministry of Housing
Title: Mthembi-Mahanyele: Signing of low-cost housing deal with
US
SPEAKING NOTES FOR HOUSING MINISTER SANKIE MTHEMBI-MAHANYELE, AT
THE OFFICIAL SIGNING OF THE OPIC DEAL, Sheraton Hotel, Pretoria, 13
January 2003
Minister Alec Erwin
Honourable Mr Robert Zollick
OPIC delegation
Members of the media
Ladies and gentlemen
Today is a great occasion in the history of housing delivery in
South Africa, marking the conclusion of an agreement on a
significant support project that started with my visit to the
United States eleven months ago. Since then officials from my
Department have been in negotiations with officials from OPIC
(Overseas Private Investment Corporation) that culminated in the
conclusion of negotiations late last year.
OPIC has agreed to fund our housing programme to the tune of R200
million in a deal that will bring much needed relief to thousands
of homeless people in South Africa. This is a landmark transaction
between South Africa and the United States of America, which is one
of the countries that have been partnering us in our quest to
develop our society and help push back the frontiers of
poverty.
Not only will this deal result in as many as 90 000 to 100 000 new
homes for needy South Africans; it also sets in train a process
whereby foreign funding for low-income housing will become a
welcome reality in the years ahead.
One of the major constraints for small contractors and women
contractors entering the construction industry remains access to
finance. Our arrangement with OPIC pilots a programme with
intermediaries that will offer credit as well as project and cash
flow management to contractors at affordable rates. So this is
about more than just money - it assists us with much needed
financial management skills.
Through Nurcha, the government is able to package finance for
low-income housing. To date, Nurcha has helped create investment
opportunities worth more than R1,6 billion in the most
disadvantaged areas of South Africa.
The terms of the initiative we are undertaking today are structured
in such a way that Nurcha will share the risk with specialised
lenders, based on agreed criteria, for lending and risk management
processes.
This is the kind of smart assistance we as government welcome,
because it can be geared into our economy in a sustainable way. It
ensures not only an ability to break down the credit blockade some
sectors of the housing market have been facing, but also the
enhancement of our own skills in the country in terms of managing
housing processes.
Allow me to take this opportunity to thank those from both the US
and the South African side who have been involved in securing this
important agreement. You have enhanced our capacity in the struggle
to overcome poverty and for sustainable development. And you have
contributed to the strengthening and sustainability of the
development-based relationship between our two countries.
Contact: Mandla Mathebula on 0833041536/012-4211515/01
Issued by Ministry of Housing
13 January 2003
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