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

2. 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

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

4. SUPPORT FOR CONSTRUCTION FINANCE RECEIVED: R MILLIONS PURPOSE GOVTOSIOTHERS OVERHEADS 20 __ LOANS AND GUARANTEES 100227.5116.80

5. 600 PROJECTS CONTAINING > 170 000 HOUSES 145 000 HOUSES BUILT PROJECT LOSSES ≥ R10 MILLION SINCE 1996 NURCHA HAS SURPORTED:

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

7. HOUSING PRODUCTS SUPPORTED SUBSIDY HOUSES > 90% CREDIT LINKED < R180 000 RENTAL INFRASTRUCTURE COMMUNITY FACILITIES

8. 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

9. 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)

10. 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

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

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

13. 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

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