SADC sub-region - AfDB Supports Regional Infrastructure Development

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USD100 million to DBSA for Infrastructure Facility

Tunis, 21 July 2006 – The Board of Directors of the African Development Bank (AfDB) approved today a non-sovereign, regional infrastructure development facility of USD100 million to DBSA (Development Bank of South Africa) to support competitive infrastructure development, expansion, and rehabilitation in the SADC sub-region.

DBSA will utilize up to 80% of the facility to support infrastructure projects in the sub-region. The major sectors would include Energy, Transport, ICTs, Water and Sanitation. The remaining 20% of the facility will be utilized to finance infrastructure-related projects in the Manufacturing, Mining, Tourism and Financial services sectors.

Through a combination of this facility and technical assistance resources under mobilization, the Bank will work with DBSA as a development and strategic partner to maximise its development impact through intermediation. It also seeks to accelerate poverty reduction efforts, facilitate regional economic integration, and institutionalize good corporate governance practices.

Estimated economic and related impact likely to result from the sub-projects supported by DBSA includes:

-  approximately 3,000 new job opportunities created in the other SADC countries and job opportunities in the informal sectors of the rural and economically deprived areas of the SADC sub-region;

-  ZAR 71million poverty alleviation impact to low-income households in SADC;

-  ZAR 620million impact on the GDP of the SADC sub-region excluding South Africa;

-  Impact of ZAR 800million in foreign exchange earnings from exports;

-  ZAR1,495million impact on capital employed in the SADC sub-region;

-  ZAR300million in tax revenues accruing to governments in the SADC sub-region, excluding South Africa.

DBSA is a development finance institution wholly owned by the Government of South Africa. The mandate of DBSA is to support infrastructure and related development projects, including economic, social and institutional infrastructure. DBSA also seeks to provide financial, technical and other assistance to private sector enterprises and institutions mainly in South Africa, the SADC sub-region, and the rest of Africa. It also acts as a catalyst to maximize private sector involvement in infrastructure and related development projects.

To date, the Bank has approved a total of 9 private sector operations totaling USD460 million in South Africa including one regional project covering South Africa and Mozambique. Recent private sector operations include a ZAR45 million to develop SMEs through franchising and a ZAR 1 billion risk-sharing LOC  for the Nedcor Group approved in 2004. In 2003, the Bank approved a LOC of USD50 million to International Development Corporation (IDC) as well as a ZAR550 million Regional Loan to Sasol Limited. The Sasol loan is for a gas pipeline project between Mozambique and South Africa.

* 1 ZAR = 0.14 USD; 1 UAD = 7. 17 ZAR in July 2006

1  LOC - Line of Credit


Onike-Houra Nicol Phone: +216 71 10 32 27
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