FOR IMMEDIATE RELEASE
August 29, 2002

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For further information, contact:
Lawrence Spinelli (202) 336-8690
Timothy Harwood (202) 336-8744

OPIC GUARANTY WILL HELP PROVIDE SHELTER TO HALF MILLION IN SOUTH AFRICA

WASHINGTON, D.C. – The Overseas Private Investment Corporation (OPIC), in its first housing initiative in Africa, will provide a $15 million guaranty to help build 90,000 homes for low-income families in South Africa, OPIC President and CEO Dr. Peter Watson announced today at the World Summit on Sustainable Development. The homes will provide shelter for up to half a million people.

Dr. Watson said the project would not only help South Africa address a 2.2 million-unit shortage of low-income housing, but would also stimulate the local construction sector through expanded job opportunities and serve as an example for local commercial lenders for future support of low-income housing.

“In addition to addressing an acute shortage of adequate shelter, this initiative will also stimulate South Africa’s construction sector with value-added benefits for builders, contractors and sub-contractors, increasing skills and training in this essential sector of the South African economy,” Dr. Watson said. This would include contractors who have been historically disenfranchised.

OPIC’s guaranty will enable a U.S. for-profit company to support a local South African bank, which, in conjunction with an affiliate of South Africa’s National Urban Reconstruction and Housing Agency (NURCHA) will continue to on-lend Rand to private developers and contractors working with NURCHA that have contracts with various local governments to construct low-income houses and associated infrastructure.

NURCHA, established in 1995 to raise debt funding for low-income housing construction, has contributed to the construction of 70,000 houses in South Africa. Subsidies are made available to individuals who earn a monthly income of 3,500 Rand (about $350) or less.

In its housing portfolio, OPIC currently provides $200 million in political risk insurance and $115 million in financing for projects in Argentina, Nicaragua, the Dominican Republic and Mexico.

OPIC was established as an independent agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.

OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in 140 emerging markets and developing nations worldwide. Over the agency’s 30-year history, OPIC has supported $142 billion worth of investments that have helped developing countries to generate over $11 billion in host-government revenues and create over 673,000 host-country jobs. OPIC projects have also generated $64 billion in U.S. exports and create more than 253,000 American jobs.