07 November 2019

Development Bank of Southern Africa (DBSA)
CEO Patrick Dlamini reported
on Wednesday that a project pipeline valued at more than R700-billion had
already been identified by the new Infrastructure Fund, which is being created
to raise a blend of public and private finance to help plug the country’s
infrastructure holes.

Speaking at the South Africa Investment Conference
on Wednesday, Dlamini said that the pipeline was likely to breach the
R1-trillion level in the coming years. However, he also stressed that projects
were at various stages of development and that further work was required to
progress many of them to bankability.

The role of the fund would be to act as a
“catalyst” for crowding-in scarce private and public capital to
address the country’s transport, water, information communications technology
and energy backlogs.

To achieve this the fund would draw lessons from
the country’s successful renewable-energy procurement programme, through which
about R200-billion of private electricity investment had been facilitated since

Denham Capital’s Jasandra Nyker, who oversaw the development of several
utility-scale renewables projects, underlined the success of the programme,
which had proved that that new power projects could be developed by the private
sector in partnership with government.

She lamented the recent four-year delay to the
programme, however, which had undermined the local supply chain and raised
doubts about the government’s commitment to honouring agreements. That said,
Nyker argued that the actual risks of investing in Africa and South Africa were
lower than the perceived risks.

Finance Minister Tito Mboweni added his support for the blended-finance model,
arguing that public–private partnerships would be required to ensure that
much-needed infrastructure was built in a context of “tremendous pressure” on
the country’s public finances.

Ramaphosa, meanwhile, said: “To generate the
funding needed for our infrastructure build programme, we have set up an
Infrastructure Fund, which is being incubated by the Development Bank of
Southern Africa.

“With an initial investment from government of
R100-billion over ten years, the fund will leverage investments from financial
institutions, multilateral development banks, asset managers and commercial
banks,” the President told investors and potential investors from over 20

New Development Bank (NDB) VP and CFO Leslie Maasdorp stressed that the
bank stood ready to support infrastructure projects in South Africa, but urged
government to improve its long-term planning, which he said would help shore up
the project pipeline needed for upscaled investment.

Established by the Brics bloc of Brazil, Russia,
India, China and South Africa, the NDB had approved another $1.6-billion in
infrastructure financing for South Africa for 2020 and was aiming to increase
approvals to $2-billion in the coming months.

In 2019, the development finance institution pledged $2-billion to South African projects but by the end of October had already disbursed $2.2-billion.

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