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NURCHA: AN INTRODUCTION

NURCHA: AN INTRODUCTION. BRIEFING DOCUMENT PARLIAMENTARY PORTFOLIO COMMITTEE TUESDAY, 2 NOVEMBER 2004. MOTIVATION. Minister’s Budget Speech “Emerging Contractor Bank” Minister’s Challenge “What do you do? What more can you do?” 3. Large Scale Infrastructure Spending. ESTABLISHED 1995

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NURCHA: AN INTRODUCTION

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

  2. MOTIVATION Minister’s Budget Speech “Emerging Contractor Bank” 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

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

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

  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

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