South Africa Housing Initiative: U.S. Contribution

Purpose of Initiative: The U.S. contribution to the South Africa Housing Initiative will support the construction of approximately 100,000 homes for low-income families in South Africa. The initiative will not only help South Africa address a 2.2 million unit shortage of low-income housing, but also will stimulate the local construction sector through expanded job opportunities, including opportunities for contractors who have been historically disenfranchised. The initiative is expected to provide shelter for up to half a million people.

Resources: The U.S. Government is supporting the Initiative through a loan guarantee of $15 million to enable a U.S. company to support a local South African bank, working in conjunction with South Africa’s National Urban Reconstruction and Housing Agency to establish a $20 million Rand equivalent five-year revolving credit facility, which will provide financing for new housing construction. OPIC’s loan guarantee will leverage additional financial resources from the other South Africa Housing Initiative Partners.

Partners: The Overseas Private Investment Corporation (OPIC), National Urban Reconstruction and Housing Agency (South Africa), Rand Merchant Bank (South Africa), Soros Foundations Network (USA).

Partnership Efforts to Date: Dr. Peter Watson, President of OPIC, announced the initiative at the World Summit on Sustainable Development in Johannesburg on August 29, 2002. U.S. Trade Representative Robert Zoellick and South African Minister of Housing Sankie Mthembi-Mahanyele signed the finance agreement on January 13, 2003, in Pretoria. Financing for new housing construction should be available beginning in 2003.

USG Points of Contact: Overseas Private Investment Corporation: Larry Spinelli (Phone: 202-336-8690; E-mail: lspin@opic.gov).