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This is an archived USAID document retained on this web site as a matter of public record.
Remarks of Ambassador Harriet Babbitt, USAID Deputy Administrator
at the Signing Ceremony, South Africa Urban and Environmental Credit Program
March 24, 1999
It gives me great pleasure to be here with you on the occasion of the signing of the Loan Agreement between the Infrastructure Finance Corporation of South Africa (INCA) and Blaylock and Partners, guaranteed by USAID.
I recently represented USAID at the U.S.-South Africa Binational Commission led by Vice President Gore and Deputy President Mbeki. One of the priorities of this year's Binational Commission was housing.
Providing decent, safe housing is an important South African government priority and the United States is committed to helping South Africa toward that goal.
During my visit, I had the opportunity to see one of South Africa's housing success stories. Cape Town's Waterview is a perfect example of a community's ability to organize and to create a safe, pleasant place to live. Waterview is a community of people who were uprooted from their rightful homes under apartheid and moved into crowded, substandard facilities.
Recently, however, they have raised money and organized manpower to build solid homes with modern facilities. Waterview is now a good place to live and to raise a family.
The housing challenge in South Africa is unquestionably huge, but I was particularly impressed by the efforts to meet it.
For the first time, people from low-income communities are living in homes of their own with piped-in water that is safe for drinking, with electricity and sanitary facilities.
These are more than just amenities. They are critical to improving health, which in turn contributes to improved productivity and educational outcomes.
Throughout the world, a house with such basic necessities is an important symbol of positive change in the lives of people who have been impoverished by oppression. My hope is that many more low-income South Africans will now be able to experience the sense of pride and reward for effort that this kind of housing and facilities bring. I am truly impressed by INCA’s role in trying to make this possible.
In the current difficult economic environment faced by many South Africans, a partnership between the public and private sector is the right approach toward achieving economic solutions. We at USAID are honored to be one of South Africa’s primary partners in supporting the development of housing and infrastructure related services. The private sector’s ability to finance water, solid waste, wastewater and electrical distribution to lower income communities is critical to overall development in South Africa.
In 1995, the South African Government estimated that the demand for infrastructure over a 10-year period will be in the range of $12-15 billion. The government will be able to provide only half of that funding. INCA is leading the way to make financing available for municipal infrastructure and the delivery of municipal services to communities that lack essential services.
Households with water, sewer and electricity services have been able to start up small businesses, such as grocery stores and dress-making shops, which generate income for themselves and in many cases other members of their community. This occasion today marks USAID’s first commitment to INCA, a financial innovator that is lending specifically for infrastructure purposes.
Since 1995, South African organizations have utilized USAID’s Urban and Environmental Credit program as a tool for development very successfully.
To date, with less than $14 million in credit subsidies, USAID has been able to provide nearly $175 million in loan guaranties -- which are leveraging approximately $465 million in loans from private South African financial institutions.These loans have been used for many different shelter-related purposes – to improve or add to existing homes, to construct new homes, and to construct infrastructure, such as water and sanitation systems in poor neighborhoods.
Overall, the Urban and Environmental credit program has helped to improve the lives of approximately 2.3 million people among the urban poor. The resources from USAID’s loan guaranties have also provided basic infrastructure services to more than 350,000 homes in South Africa. These fundamental investments are helping to bring hope and a healthy environment to the urban poor.I am excited by the possibilities of what can be achieved with these resources and I look forward to following INCA’s accomplishments with their municipal partners.
I wish INCA and its shareholders success in the future and hope that you will serve as a model not only in South Africa and in other important emerging markets. USAID is honored to participate in these efforts and we look forward to continuing our close collaboration.
Thank you.
This is an archived USAID document retained on this web site as a matter of public record.
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Last Updated on: July 12, 2001 |
