The Government is to give €5 million to a charity run by an Irish businessman that is set to build 7,000 homes in South Africa by next year.
The decision by Irish Aid to contribute money to the Niall Mellon Township Trust marks the first time that the charity has received direct help from the Government.
Before he cut the ribbon on the latest home built by the trust, Taoiseach Bertie Ahern paid tribute to the 3,000 Irish builders, tradespeople and others who had helped since the beginning.
"There is a huge sense of pride and satisfaction that 3,000 Irish volunteers have worked on this for the last six years and what they have succeeded in doing by and large with resources that they have raised themselves. It has made a huge difference."
The building project, which has now started operations in Johannesburg, has "captured the imagination of everyone back in Ireland", Mr Ahern told hundreds of locals.
The Taoiseach was accompanied to the township 45 minutes outside Cape Town by the Minister of State for Overseas Development, Michael Kitt, and the Irish Ambassador to South Africa, Colin Wrafter.
Unlike many other western countries, Irish overseas aid is not tied to trade deals "and that is something that we can all be very proud of," the Taoiseach said.
"In money terms, we are the sixth-greatest per capita contributor. Every Irish person should be very proud of our involvement and success in so many countries, building on the great work of the missionaries."
Meanwhile, Minister for Enterprise, Trade and Employment Micheál Martin has announced a deal that could see one-third of South Africa's mushrooms being grown with the help of Irish peat within 18 months.
Co Monaghan company Harte Peate, which has 25 employees in Clones, sells deeply-dug wet peat which is used as a base for growing mushrooms.
Now the company is bidding to expand its markets in Africa into Mozambique where the peat can be used to soak oil pollution left by Portuguese oil drillers in the 1970s.
Mr Martin met the company's managing director Tom Harte in Cape Town yesterday, who briefed the Minister on the company's future plans.
The Harte deal is the first to be signed in South Africa during a week-long visit by 55 Irish companies from North and South in the largest yet such mission to travel there.
The trade mission last night travelled to Johannesburg where further deals are expected to be signed today and the Taoiseach will address an Enterprise Ireland lunch.
Mr Ahern and Mr Martin will also support efforts by An Bord Bia to boost Irish meat sales to South Africa. The Irish Dairy Board's efforts to boost sales of Kerrygold butter - first sold in South Africa in 1995 - will also be supported by Mr Martin.
Meanwhile, the Taoiseach has launched the €8 million Chello Foundation fund for Liberty Global, the owners of Irish cable companies NTL and Chorus, to help Aids orphans in South Africa and Kenya.
