Bank to raise funding for infrastructure

THE Development Bank of Southern Africa is ramping up its funding on the back of a form of government guarantee, which will enable it to expand its loan book by more than R100billion over the next five years.

DBSA chief executive Paul Baloyi said if an additional R20billion "callable capital injection" from the government, which has a similar effect to a government guarantee, was properly leveraged the bank could at least double, if not quadruple, its financing over the next three to five years.

He said the bank did not ask for any additional financial capacity to fulfil its normal role, just to expand its role.

The DBSA's financial results to end-March, which were released yesterday, show that its disbursements of loans and equity investments grew by 51percent to R9,3billion from R6,2billion in the previous year.

The DBSA has been increasing its distribution to South Africa's poorest municipalities. Baloyi said the DBSA played an important role in unlocking funding flows to poor or weak municipalities.

Chairman Jay Naidoo said the bank's expanded financing would be available for public and private entities, and joint ventures between the two, investing in infrastructure and other priority sectors.