Development Bank Approves Billions for Infrastructure in Southern Africa

Africa infrastructure
Africa is currently in an infrastructure boom

The Development Bank of Southern Africa approved R27.5-billion for infrastructure projects, 86% of which are in South Africa, during 2011/12, the bank said on Monday.

Announcing its annual results in Tshwane, the bank said that total commitments for the financial year ending March 2012 were R8.4-billion, while disbursements totalled R8.1-billion.

Renewable energy programme

The bank said it was working with South Africa’s National Treasury and the Department of Energy on a renewable energy programme involving independent power producers.

South Africa has so far selected 47 preferred bidders to provide 3725MW of renewable energy through this programme, and the DBSA said that its support of approved projects amounted to a potential participation value of R22.6-billion.

Municipal infrastructure development

In support of municipal infrastructure development, the bank said it had approved R8.7-billion in funding for South Africa’s municipalities – although its ability to convert these approvals to disbursements had been affected by “strong participation” from the country’s commercial banks.

“In the areas of medium and under-resourced municipalities, the bank successfully disbursed R797-million and R63-million to the two markets respectively,” the DBSA said in a statement.

To help improve municipalities’ ability to maintain and develop new infrastructure, the bank had also, through its Vulindlela Academy, trained 19,000 people in planning, finance, and management in 2011/12, including 12,787 officials from the country’s municipalities and development finance institutions.

“Furthermore, as part of the DBSA’s support to local government, technical and planning experts were deployed to various municipalities throughout the country to alleviate constraints on service delivery,” the bank said.

The bank also supported the Department of Basic Education’s school infrastructure programme, providing project planning, preparation and management for the construction of 49 schools in the Eastern Cape. The project, to the value of R672-million, is expected to be completed towards the end of 2012.

Regional infrastructure development

In supporting development in the wider southern African region, the bank disbursing US$54-million of a $206-million loan facility to the Zimbabwe National Road Administration – its biggest commitment to Zimbabwe to date.

In addition, R1.3-billion was disbursed to Zambia’s National Road Fund Agency, while R542-million was disbursed to the Eastern and Southern African Trade and Development Bank as part of a credit agreement reached during the year.

The bank said its results for the year “were lower than expected in a very challenging operating environment”. While total assets grew by 10.5% from R47.4-billion to R52.4-billion, “impairments and unrealised revaluation loses on equity investments impacted negatively on the Bank’s net earnings, resulting in a net loss of R370-million”.