NURCHA: AN INTRODUCTION BRIEFING DOCUMENT PARLIAMENTARY PORTFOLIO COMMITTEE TUESDAY, 2 NOVEMBER 2004

MOTIVATION 1.Minister’s Budget Speech “Emerging Contractor Bank” 2.Minister’s Challenge “What do you do? What more can you do?” 3.Large Scale Infrastructure Spending

ESTABLISHED 1995 Joint Venture:SA Government and Open Society Institute Mandate:Bring Banks to the Party Focus:Project Bridging Finance Mechanism:Guarantees

SUPPORT FOR CONSTRUCTION FINANCE RECEIVED: R MILLIONS PURPOSE GOVTOSIOTHERS OVERHEADS 20 __ LOANS AND GUARANTEES

600 PROJECTS CONTAINING > HOUSES HOUSES BUILT PROJECT LOSSES ≥ R10 MILLION SINCE 1996 NURCHA HAS SURPORTED:

NURCHA’S CLIENTS SMALLER DEVELOPERS/CONTRACTORS ESTABLISHED CONTRACTORS SMALL/MICRO RENTAL ENTREPRENEURS LARGER RENTAL DEVELOPERS

HOUSING PRODUCTS SUPPORTED SUBSIDY HOUSES > 90% CREDIT LINKED < R RENTAL INFRASTRUCTURE COMMUNITY FACILITIES

RMB Revolving Credit Facility ± R 160 million NURCHA Loans Intermediary Contractor R 20 million first loss guarantee (Sida) OPIC & OSI $ 20 million guarantee THE OPIC/RMB FUND FOR SMALLER CONTRACTORS

FIRST 27 COMPLETED PROJECTS 15 Emerging Contractors (6 Women) 12 Joint Ventures 4200 Completed Houses Profit from 4% - 18% Average Profit R2 000 per house (Profit before VAT refund)

NURCHA’S CONTRIBUTION TO NEW PLAN FINANCING CAREER PATH FROM SMALL EMERGING CONTRACTORS TO LARGE EMPOWERED COMPANIES WITH NURCHA FINANCING EVERY STEP OF THE WAY FOR HOUSING, MIG, PIG AND EPWP

RELATIONS WITH GOVERNMENT Public Entity: PFMA Compliant PFMA Approved Constructive Interaction with: Housing DPLG DPW Provinces Metros

GOVERNMENT CONTRIBUTION Profitable Contracts Payment on Time Cession of Payments Repeat Business Harmonising Procurement and Loan Policies

NURCHA IS WELL PLACED Products and Systems in Place Housing and Infrastructure Programmes Substantial Funding in Place Access to Further Funding Intermediary Infrastructure Good Governance Track Record

GETTING THERE FROM HERE Buy in and Support Capitalisation Human and Technical Capacity