Development Bank of Southern Africa: Investing for the future of Southern Africa

One of the biggest requirements for economic development in Southern Africa is that of investment. Expenditure in infrastructure creates commerce, new skills, jobs and a way out of poverty. The Development Bank of Southern Africa (DBSA) was established in 1983 to perform, in its own words, “a broad economic development function within the homeland constitutional dispensation that prevailed at the time.”

The Development Bank of Southern Africa (DBSA) has its head office in Johannesburg and is a state owned entity with the purpose of accelerating sustainable socio-economic development and improve the quality of life of the people of the Southern African Development Community (SADC) by driving financial and non-financial investments in the social and economic infrastructure sectors.

business-bankingIts work within the area of social infrastructure is aimed at addressing backlogs and expediting the delivery of essential social services to support sustainable living conditions and a better quality of life within communities.

Economic infrastructure is of course essential to help build a sustainable local economy. DBSA has a focus aimed at addressing capacity constraints and bottlenecks in order to optimise economic growth potential. The DBSA has prioritised water, energy, transport and ICT as its key focus areas.

“The Development Bank of Southern Africa (DBSA) is one of the leading Development Financial Institutions (DFIs) in South Africa and Southern Africa. The DBSA provides financing, project preparation and implementation support in South Africa and the rest of the African continent to improve the quality of life of people in support of economic growth and regional integration. DBSA is integrated across product markets, sectors and clients and delivers synchronised infrastructure solutions,” describes the organisation’s website.

Much has changed since DBSA’s inception 32 years ago and its role has gone through subtle amendments also. The organisation was given a new mandate from Government through Act 13 of 1997 to: promote economic development and growth, human resources development and institutional capacity in the region; support sustainable development projects and programmes in the region; and, to focus on infrastructure and leverage the private sector.

In November 2014, news broke that DBSA and Tshwane Rapid Transit had completed a R488 million loan agreement to procure buses.

The loan forms part of a R800 million loan for the purchase of 171 buses for the A Re Yeng (meaning “let’s go”) Bus Rapid Transit (BRT) operations in Tshwane. TRT will be the bus operator for Phase 1 of the City of Tshwane’s Integrated Transport System.

The project is part of a national programme of 13 RT projects in different cities and towns, meant to improve the public transport system across the country and to limit current challenges associated with road capacity, road safety and road congestion.

Speaking at the signing, T.P. Nchocho, Group Executive for DBSA South Africa Financing said, “This transaction is part of DBSA’s investment in the public transport sector to ensure the migration of South African cities into efficient, safe, and green transport systems. The DBSA, in partnership with the National Department of Transport and 13 cities approved to launch BRT services in South Africa, will roll out more of these projects.”

The project is aimed at redressing past inequities to create a better life for all by addressing lack of an integrated transport system in the City including safety concerns about the existing transport system; historical legacy of apartheid spatial planning where the poor were forced to live furthest from work; long travel times through serious congestion and difficult transfers; inaccessibility of public transport for people with disabilities, the aged and the infirm and inadequate historical investment in public transport, which has meant that both existing infrastructure and fleet are in an unacceptable poor condition.

In March of this year DBSA, through its Infrastructure Delivery Division, which provides project planning, management and implementation support to government departments and other state institutions in priority sectors including health, education, water and housing signed Memoranda of Agreement with the South African Forum of Civil Engineering Contractors (SAFCEC) and Black Business Council Built Environment (BBCBE).

The purpose of these agreements is to create and legitimise the partnerships among the parties. These partnerships are aimed at establishing and formalising a collaborative framework to optimise cost, time, quality and socio-economic outputs of infrastructure delivery programmes in South Africa. Additionally, the parties will leverage on each other’s mandates to enhance efficiency and effectiveness in the delivery of infrastructure projects thereby developing models designed to reduce contractor failures. 

Sinazo Sibisi, Group Executive of Infrastructure Delivery at the DBSA said “We want to be a centre of excellence which is not only solution driven but focuses on the delivery of infrastructure in South Africa and the rest of Africa by transforming the built environment sector. We help drive infrastructure solutions within our sphere of operation with a view to addressing institutional failure thereby accelerate socio-economic infrastructure in the public sector.”

Speaking on behalf of SAFCEC, CEO Webster Mfebe retorted that “The partnership will play a synergistic and catalytic role in the delivery of infrastructure. Of cardinal importance is to ensure that transformation happens by addressing the plight of marginalised sectors of society such as women and the youth.”

pylon“The agreement will ensure equitable sharing of opportunities through the participation of women in the built environment sector. Furthermore, the collaboration will enable the partners to deliver on the provisions of the agreements”, concluded Paul Kgole, President of BBCBE.

The parties share a common interest of ensuring effective delivery of infrastructure in the country, with particular focus on fostering skills development; job creation and contractor development.

In May SADC’s Project Preparation and Development Facility (PPDF), managed by DBSA, approved its first allocation of preparation funding.

​This was to the tune of US$ 3.5 million towards the development of the multi-country Regional Interconnector Transmission Line Project.

The PPDF is funded both by the German Government (BMZ) financed through the KfW as well as the EU through its regional office in Gaborone. This project will be funded from the KfW contribution. The countries that are set to benefit from this project are Mozambique, Zimbabwe and South Africa (MoZiSA).

Commenting on the significance of the funding approval, Mr Patrick Dlamini – Chief Executive of DBSA says, “This is a historic milestone for the PPDF since its inception and signifies the progress towards attaining its mandate.

“The purpose of the PPDF is to create a conducive environment for investment through financing the preparation of infrastructure projects based in at least one SADC Member State or those with a direct and positive impact on another Member State,” he added.

The MoZiSA Regional Interconnector Project comprises the development, construction and operation of a 400kV or 500kV high-voltage transmission infrastructure over a distance of approximately 935 kilometres, including transmission lines and associated substations through South Africa, Zimbabwe and Mozambique with the view to facilitate the strengthening of the existing ‘North South transmission interconnection corridor’ in Southern Africa.

The project is sponsored by the member countries’ national power utilities which are Electricidade de Moçambique (EdM), Zimbabwe Electricity Supply Authority (ZESA) and Eskom (South Africa). 

“We as SADC and our partners DBSA, EU Delegation based in the SADC Regional Office and KfW are excited about this milestone – more importantly because the outcome of this phase will assist in the development of a multi-national strategy to facilitate trade and improve regional interconnectivity in the SADC region,” concluded Dr. T Mhlongo,  Deputy Executive Secretary at SADC. 

Just further evidence of the important role DBSA plays in securing better futures for millions.