Development Bank of Southern Africa (DBSA) disbursed a total of R3.7 billion in support of infrastructure and development projects in 2007 and approved R8.3 billion worth of projects, the bank reported in August of last year.


The disbursement figure for 2007 was above the R3 billion paid out in 2005/6, as well as the five-year average of R3.2 billion.


Paul Baloyi, DBSA’s CEO, said at the time that 1.58 million households had benefited from bank


The number of households receiving new or improved basic services as a result of the DBSA operations increased from 1.16 million to 1.6 million.


However, the number of approvals in the South African environment fell from a record R5.1 billion in 2005/6 to R3.6 billion as the group honed in on poorer municipalities and provinces.


South African operations executive Luther Mashaba also pointed out that the gap between approvals and disbursements had narrowed, with 36% of the projects approved in 2005/6 not converting to fixed commitments. In the period under review, R2.9 billion of the R3.6 billion approved was converted against a target of R2.2 billion.


The bank’s exposure to the Southern African region also increased, with approval values surging to nearly R12 billion from the previous year’s R8 billion.


Its private sector and international investment unit recorded total loan and equity approvals of R4.65 billion, well up on the R2.95 billion of 2005/6. However, unlike the domestic environment, which had seen a trend towards smaller projects, the private and regional pipeline was generally characterised by larger projects, as measured by value per project, with the emphasis on large public-private partnerships (PPPs) and multicountry-type ventures.


The DBSA said it still had an appetite for information technology, mining, transportation, tourism and energy and that it actively supported the development of regional capital markets.


The private sector unit also hinted at a return to favour of the controversial issue of private-sector involvement in the delivery and operation of municipal infrastructure.


Hard on the heels of this report came an announcement in September that DBSA and the Agence Française de Développement (AFD) signed a financial agreement to promote financing opportunities to accelerate Africa’s infrastructure development over the next five years.


In terms of the agreement, the two organisations have pledged €2.2 million (about R21.8 million) each to finance the preinvestment stages of regional integration infrastructure projects identified by the New Partnership for Africa’s Development (Nepad).


In 2003, the DBSA and the AFD established the Project Preparation and Feasibility Study (PPFS) fund for these investments.


The bank said that the PPFS facility had played a catalyst role and had mobilised other funds from relevant international finance institutions and donors in supporting project implementation.


The two companies also agreed that the AFD would provide further technical assistance to source an expert in the energy field, to be financed through a €600 000 (about R5.4 million) grant.

The DBSA would provide financing for developments or sourcing of funds from other partners or stakeholders and would also assist in obtaining and managing community support through its structural community and stakeholder management strategy.


“We have a mandate of promoting the economic development and growth, human resource development, institutional capacity building and the support development projects and programmes in the Southern African Development Corporation region and in Africa in general. This agreement serves as an intervention in meeting that mandate,” Baloyi said.


On the South African local government front,  DBSA has also remained very active. In early December, it reported that its ‘Siyenza Manje’ initiative is harnessing engineering, finance, town planning, and project management skills. The aim is to equip municipalities in ‘challenged localities’ to identify, design, and implement basic infrastructure projects where this level of service delivery is most needed.


In the interim period, which ended in September 2007, skills deployment figures rose from 81 to 118 experts in vital fields. This ‘hands-on’ support to accelerate infrastructure project implementation was also extended from 86 municipalities to 101 municipalities.


Knowing that skills don’t hang around on the street waiting to be picked up, and in attempts to draw in the critical skills it needs, the bank is now contracting institutions with the expertise to deliver infrastructure projects on the ground. “We have taken on one or two companies,” Baloyi said.


Aimed at complementing government’s ‘Project Consolidate’, which identifies underperforming municipalities to be provided with skilled assistance, the initiative has facilitated the disbursement of R1 billion in municipal grants.


For the six months under review, the initiative cost R43 million to implement. Of this, R30 million came from the National Treasury and R13 million from the DBSA development fund.

The existing commitment of the development fund is R118 million, including commitments of R5 million approved in the last six months.


The amount would continue to support municipal and other capacity-building efforts in the short to medium term. Although figure is lower than the amount of R213 million at the same time last year, the bank pointed out that this reduction is due to the ‘Siyenza Manje’ interventions and improvements in grant management.


“The fund has put measures in place to fast-track grant funding and disbursements and has confidence that these commitments will be disbursed to achieve the intended project objectives and development impact,” it was reported.


In early December, DBSA also announced plans to appoint engineering consulting and project management firms to provide technical services during the implementation of municipal infrastructure projects.


The organisation, present at 101 municipalities across South Africa, said that the engineers and consultants would support its project management unit (PMU), assist in the identification and assessment of infrastructure projects and help with feasibility assessment and technical report preparation and assessment.


The firms would also help register Municipal Infrastructure Grant projects, project planning and preparation processes, construction procurement processes and project implementation.


The DBSA assists municipalities with project management expertise and the preparation of technical reports and deals with issues surrounding contract management. It recently said that it had implemented 1 345 and completed 186 infrastructure-related projects at local municipalities.


Municipal infrastructure projects that would employ the consultants’ services range from bulk water infrastructure schemes to roads, housing and community centres.


In the PMU, the engineers and consultants would provide expert staff for the unit, establish systems and procedures for project management, and establish proper monitoring, evaluation and reporting processes for projects implemented, including field work and site meetings, the bank said.

Other services would include the establishment of reporting systems for both local and national spheres of government, the development of standard contract documentation, capacity building, ensuring adherence to the national and municipal supply chain management regulations in the procurement of services and ensuring compliance with the Construction Development Board, the Occupational Health and Safety requirements, labour law and the Expanded Public Works Programme.


During project implementation, consultants would serve as lead agents of the municipality, ensuring that progress was in line with the agreed schedule and budget. They would also be responsible for managing the scope of the work, monitoring costs, project administration and financial reports, the bank stated

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