AfDB Approves US$ 320 Million in Lines of Credit to Standard Bank and Nedbank of South Africa
Tunis, 11 September 2008 – The Board of Directors of the African Development Bank (AfDB) approved on Thursday in Tunis, two lines of credit totaling US$ 320 million to Standard Bank of South Africa (SBSA) and Nedbank, both o based in South Africa to provide long-term funding for infrastructure, industry and natural resource projects in Africa, outside South Africa.
The loans will provide both banks with long-term funding. Whilst the international "sub-prime" credit crisis has not directly impacted financial market liquidity in South Africa, it has increased the cost of long-term funding. The funding received will further diversify and enhance the capital base of both banks.
In this context, Mandla Sizwe V. Gantsho, AfDB Vice President for Infrastructure, Private Sector and Regional Integration, said: "the approval of these loans is very timely, given the current difficulties in the financial markets arising from the sub-prime lending crisis. Africa’s infrastructure development cannot be put on hold by such difficulties. The AfDB is playing a rightful and strategic role, by being instrumental in supporting strong South African financial institutions to make sure that they can continue playing their infrastructure financing role across Africa and contributing to the achievement of development outcomes for the whole Continent."
Mr. Gantsho is the former CEO of the Development Bank of South Africa (DBSA), and moved to ADB two and a half years ago serving not only South Africa and the SADC Region, as he did when he was at DBSA, but the entire African Continent.
Under the approvals, SBSA, one of Africa’s largest banks with a strong continental presence, will receive up to US$ 220 million line of credit to help feed its project finance operations on the continent.
David Munro, Chief Executive, Corporate and Investment Banking, Africa at SBSA said, "We are very pleased to access this source of long term dollar funding that will assist us in providing finance to our infrastructure clients on a more sustainable basis."
Nedbank will receive US$ 100 million to fund its project finance portfolio in Africa. The bank is considered to be among the most creditworthy institutions on the continent with an investment-grade credit rating.
Mark Weston Managing Director, Joint Head of Investment Banking at Nedbank Capital said, "Nedbank are pleased to once again be working with AfDB and securing a meaningful US Dollar Line of Credit to support Nedbank's project financing activities into the continent. This aligns with our strategy of selectively expanding our activities into Africa outside of South Africa."