Tshwane's deal with DBSA for R1.6bn loan

City Manager, Jason Ngobeni has confirmed that Tshwane has borrowed R1.6bn from DBSA to finance development plans. Image: City of Tshwane

This facility aims to accelerate the eradication of backlogs in water and sanitation, roads, electricity and housing related infrastructure, as well as to support the city's growth and development initiatives.

Supporting municipalities to deliver socio-economic infrastructure remains a key focus for DBSA to address the country's triple challenges of high unemployment, poverty and inequality.

The Bank participates in public bond issuance programmes and other funding, including project finance, to accelerate the delivery of social and economic infrastructure, such as the bus rapid transport systems in metropolitan areas.

City Manager Jason Ngobeni said the facility will be used to fast track the city's infrastructure capital programme designed to match expenditure with long-term assets.

Long-term loan

"This is the inaugural 20-year loan tenure for the city, which coincides with the celebration of the country's 20 years of democracy.

"This level of capital investment in the city was, in part, necessitated by the need to improve the enlarged infrastructure of Tshwane, which now includes the municipalities of Metsweding, Nokeng Tsa Taemane and Kungwini," said Ngobeni

He said that in the current financial year, 37% of the capital programme will be funded through long-term borrowing and the rest will come from capital grants and internal resources.

DBSA Group Executive for South Africa Financing Division, Tshokolo Nchocho, said the facility forms part of the DBSA's continuous and accelerated support to municipalities in eradicating infrastructure backlogs.

Like many other metropolitan municipalities in the country, Tshwane has its substantial infrastructure backlogs, which create challenges in facilitating and increasing access of basic services, particularly those in the previously disadvantaged areas.

"In ensuring that metropolitan municipalities remain the heartbeat of the country's economic growth, DBSA has embarked on a process to package a comprehensive support programme aimed at addressing each metro's individual requirements while at the same time ensuring that the bank delivers on its development mandate," Nchocho said.