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Press Release

Monday, November 19, 2007

U.S. Small Business Uses OPIC Insurance to Develop Affordable Housing in Tanzania

WASHINGTON, D.C. – A U.S. small business will use political risk insurance from the Overseas Private Investment Corporation (OPIC) to develop a housing construction business in Tanzania that will generate both hundreds of homes and affordable housing finance for low- and middle-income Tanzanians, OPIC President and CEO Robert Mosbacher, Jr. announced today.

The Pan African Management and Development Company (Panafra) of Cincinnati will use $575,000 in OPIC insurance to support its minority participation in Mutual Ventures Limited (MVL), a Tanzanian housing construction business that is acquiring and developing land plots in several locations throughout the country.

MVL is building low- and middle-income housing units, and related infrastructure and utilities, on the plots. Once constructed, the company will sell the homes and provide assistance to homebuyers in obtaining affordable mortgage financing. The prices of the units are expected to range from US$20,000 to US$75,000.

The company is already constructing a housing development in the South Beach community of Dar es Salaam which, when completed, will comprise approximately 500 units.

Panafra, established in 2005, spent its first 18 months of existence identifying African housing markets most likely to provide favorable investment returns and settled on Tanzania, because of its political stability, position as a regional economic hub, and growing capital markets and banking infrastructure.

Mosbacher noted that while demand for affordable residential housing in Tanzania is high, and the country boasts a large number of civil and private sector employees capable of paying US-styled mortgages, little mortgage financing is currently available. At present, most homebuyers purchase property in full by the move-in date.

“Tanzania is poised for significant economic growth, and nothing would support that trend more than the development of a modern housing industry, one which would include not only construction but affordable mortgage finance. This project supports both,” Mosbacher said. “OPIC is pleased to support a project with so many developmental benefits.”


OPIC is the U.S. Government’s development finance institution.  It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy.  Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad.  OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.

 

Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported nearly $200 billion of investment in over 4,000 projects, generated $74 billion in U.S. exports and supported more than 275,000 American jobs.