Mandate and regulatory framework
Mandate
(per DBSA Act)
The main objectives of the Bank are the promotion of economic development and
growth, human resources development, institutional capacity building, and
the support of development projects and programmes on the African continent
South African
Government
National
Department
National
Treasury
Economic
Development
100%
Major DFIs
100%
Industrial
Development
Corporation
DBSA
Housing
Trade and
Industry
100%
100%
National
Housing Finance
Corporation
National
Empowerment
Fund
100%
Land Bank
•
•
•
•
•
DBSA 100% owned by the SA Government
Oversight by the National Treasury (Finance Ministry) and ultimately
Parliament
Incorporated as a development finance institution (DFI) under the
DBSA Act (no 13 of 1997)
Regulated by the Public Finance Management Act
Not regulated by the SA Reserve Bank or Bank Act
| 1
DBSA plays a critical role around implementation of the National
Development Plan (NDP)
DBSA’s role
Outcome
Example
Create an economy that will create more jobs
• IDD: ASIDI and Eastern Cape Rural Housing
Investing in economic infrastructure
• Funding of various energy, transport and ICT
projects
Environmentally sustainable and resilient: Transition to a
low carbon-economy
• Preparation and funding of IPPs
An inclusive and integrated rural economy
• Funding of bulk water supply
• Eastern Cape Rural Housing Programme
South Africa in the region and the world
• Funding of projects in SADC
• North-South corridor
Transforming Human Settlements
• Eastern Cape Rural Housing Programme
• Housing Impact Fund
Improving the quality of education, training and
innovation
• IDD: ASIDI programme
• Funding of student accommodation
Quality health care for all
• IDD: refurbishment of health clinics and
construction of doctors’ rooms
Social protection
Building safer communities
Building a capable and developmental state
Provision of technical support in the planning and
implementation of projects
Fighting corruption
IDD: management of procurement processes in
appointing service providers
Transforming society and uniting the country
Direct
Indirect
Supporting development impact through investment
in social and economic infrastructure
| 2
Not applicable
DBSA strategic framework is aligned to the government’s
economic policy and programs
National imperatives
National Development Plan
Presidential Infrastructure Coordinating Commission
Vision
A prosperous and integrated region, progressively free of poverty and dependence
Mission
To advance the development impact in the region by expanding access to development finance and effectively
integrating and implementing sustainable development solution
Improve the quality of life
of people through the
development of social
infrastructure
Support Economic Growth
through investment in
economic infrastructure
Support Regional
Integration
Strategy Objectives
Sustained growth in
development impact
Integrated infrastructure
solutions provider
Financial Sustainability
Strategic Enablers
Balance Sheet
Capacity
High Performance
Culture
Partnerships
Business
Intelligence
Operational
Excellence
Innovation
Values
Shared Vision
High Performance
Service Orientation
Performance Measures
Growth in disbursements: 20%+ CAGR
Cost to income ratio: 35% long term
Return on equity: 5-6% in long term
Equity Growth: Inflation linked
IDD Growth: Full cost recovery and R500M revenue
Innovation
Integrity
Competitive Advantages
Integrated infrastructure solutions provider (“cross-sell”)
Early stage risk (project prep)
Trusted partner
Access to infra. decision-makers (esp. public sector)
Basel III – ability to provide longer tenor debt
| 3
DBSA primarily plays a key role in the prepare, fund and build
phases of the infrastructure development value chain
DBSA’s primary focus
1
2
Client / markets
Services
Plan
• Under-resourced
municipalities
Plan
3
Prepare
4
Finance
Prepare
5
Build
•
•
•
•
•
•
Project identification
Feasibility assessments
Technical assistance
Financial structuring
Project Preparation funds
Lead arranger
Provide vanilla and
boutique financing
opportunities
• Debt
• Mezzanine Finance
• Limited non–recourse
lending
• MLA
• Managing the design and
construction of key
projects in the education,
health and housing
sectors
• Project Management
support, including to the
Jobs and Green funds
•
•
•
•
Municipalities
Public-private partnerships
Public-public partnerships
Regional integration
South Africa
• National and provincial
• Municipalities
government departments
• State–Owned Enterprises • Municipalities
• Public-Private Partnerships
• Public-Public Partnerships
• Private sector
Maintain /
improve
• Supporting the
maintenance and/or
improvement of social
infrastructure projects
• National and provincial
government departments
• Municipalities
The rest of Africa
• State-Owned Enterprises
• Public–Private Partnerships
• Private sector
Integration across the value chain and innovative solutions to drive
infrastructure delivery and development impact
| 4
Record infrastructure disbursements of R12.7Bn – 39% growth
Total disbursements
Highlights
18,000
DBSA
Restructuring
16,000
14,000
15.4
R million
Total approvals amounted to R14.0 billion and
commitments to R12.2 billion
•
Total disbursements of R12.7 billion (2012/13: R9.2
billion & 2013/14 target: R11.0 billion) supporting 116
projects:
12.7
12,000
10,000
•
8.3
8.3
9.2
8.0
8,000
6,000
4,000
•
Energy sector – 53% of financing
•
South Africa – 72% (R9.1 billion) of total
disbursements
•
Rest of SADC: R3.6 billion (2012/13: R1.6 billion)
2,000
2009/10
2010/11
2011/12
2012/13
2013/14
Actual
2014/15
Target
Disbursements per sector
Disbursements: SA vs Rest of SADC
Other
14%
Rest of
SADC
28%
Housing &
education
3%
ICT
5%
Water &
sanitation
7%
Energy
53%
South Africa
72%
Roads &
transportation
18%
|
5
Development impact
Municipal Funding: Households benefited
140,000
117
Number of households benefited
120,000
100,000
264 000
households
benefiting from
municipal financing,
35% of funding
from the DBSA
84
80,000
Energy Generation
• Renewable: 2,588 MW (16% of funding from DBSA)
• Coal IPP: project preparation financing for 3,600 MW
Housing
• Funded 120,000 units of housing (30% of project
funding from DBSA)
Roads
• Enabled 1,880km of roads (55% of project funding
from DBSA)
Education
• Student accommodation of 1,630 beds (46% of
project funding from DBSA)
60,000
40,000
Non-municipal Funding (RSA and SADC):
Projects supported via third party financing:
34
29
20,000
Electrification
Water
Sanitation
•
ICT broadband cable system
•
Two new airports in Africa and the expansion of one
in South-Africa
•
Cellular operations in the rest of Africa
•
Various renewable energy projects
Roads
DBSA is playing a pivotal role in development
Note: Estimate as of time of commitment; DBSA contribution relates to the portion of project financing provided by the DBSA
|6
Infrastructure financing
Targeting 20% annual growth rate for next three years:
•
~ 70% in South Africa, remaining 30% in the rest of Africa
•
More than doubling our disbursements to under-resourced municipalities
Total disbursements
25
R22.0 bn
CAGR:
20
R17.8 bn
R15.4 bn
R billion
•
Rest of Africa: 18%
15
R12.7 bn
10
R8.1 bn
South Africa: 25%
R9.2 bn
5
0
Actual 2012
Actual 2013
Actual 2014
South Africa
2015
2016
2017
Rest of Africa
We aim to be at the heart of infrastructure development on the continent
Our growth ambitions will enable DBSA to become a leading infrastructure financier in Africa,
meaningfully contributing to economic growth and regional integration
| 7
CONTENTS
ITE
M
PRESENTATION CONTENTS
PAG
E
1.
CONTEXT – Financing Role of DFIs
3
2.
DBSA Mandate as an Infrastructure DFI
4
3.
DBSA Investment appraisal module
5
4.
DBSA Investment Appraisal and responsible investment
6
5.
DBSA social appraisal module
7
|
2
Development finance institutions (DFIs) support the promotion of human
rights through the provision of sustainable financing essential for social
and economic development.
Risk
Public Sector
Fiscal transfers
and grants
Cost
Recovery
Private Sector
Capital
DFI
Role
Cost recovery
potential
Cost
Recovery
Risk
Access to long term financing to support sustainable development is essential to enable the growth
required to facilitate Africa’s social and economic transformation and address the continents
infrastructure and social services backlogs.
DFIs play a catalytic role in financing sustainable investment, providing technical services essential
to package sustainable development solutions, and promoting responsible investment practices.
Over 140 DFIs operate in Africa, with the mandate to finance infrastructure, agriculture,
manufacturing, housing and small and medium enterprises (SMEs).
Source: Calice (2014); Graphic Adapted from Musasike, L et
|
3
The DBSA is an infrastructure Development Finance Institution (DFI) that
operates in South Africa and Africa.
The DBSA’s strategy is based on supporting national infrastructure imperatives including the
National Development Plan and work of the Presidential Infrastructure Co-ordinating
Committee while achieving financial sustainability as a foundation for future growth.
Achieve financial
sustainability as
foundation for future
growth
DBSA to achieve financial
sustainability over the
medium term (grow equity
greater than inflation)
within acceptable risk
framework:
• Revenue maximisation
• Non-interest income
growth (e.g.
syndication)
• Operational cost and
impairments
management
• Direct delivery:
activities agreed with
the shareholder and
only undertaken on a
SOURCE: full cost recovery basis
Provision of development finance and delivery capacity to build
and maintain sustainable infrastructure
Infrastructure funding
Direct delivery
Deliver infrastructure
Drive investments focusing on:
• SA (energy, health, transport &
logistics, water, ICT, housing,
municipal infrastructure,
education, LNG)
• International (energy, transport
& logistics, bulk water, ICT)
• Grow development assets
• Leverage third party funds
through syndication
• Diversify product offering in
support of infrastructure
development (e.g. trade
finance)
Support key government
priorities: local government,
health, education and regional
integration;
Support the catalytic
implementation of particular
development interventions for
maximum development impact
|
DBSA
4
As an infrastructure DFI, the DBSA provides financing for development
solutions that are economically, socially and environmentally
sustainable.
Social Appraisal:
To consider potential investment projects, the DBSA conducts
an integrated appraisal module incorporating:
• Mapaka and Juana
Income Generation
Model
 Income: Pn x Qn
 Less direct
expenses:
P n x Qn







Financial
Appraisal:
Assess financial &
investment model
Verify financial &
equity assumptions
Stress test model
Propose funding
options
Institutional
Appraisal:
Role of Board
Strategic plan
Organizational
structure
Institutional
capacity
Policy
compliance
Legislative
compliance
Management
capacity
Socio Economic Market
Assessment including:
 Market
 Resources
 People
 Existing
developments
 Demand /
absorption
capacity for project
Technology Options
 Conceptual design
 Environmental impact
& sustainability
 Operations &
maintenance
considerations
 Appropriateness of
use pay options &
take off agreements
 Capital Expenditure
Finance
 Cash flow
 Income statement
 Balance sheet
 Stakeholder identification
Community mobilization
Representative structures
Impact on affected parties
Impact on beneficiaries
Readiness to receive project
Economic Appraisal
 Local economy/ socio economic
analysis
Cost benefit analysis
Estimated development impact
Sector Appraisal
Project fit to sector development
objectives
Project demand
Project feasibility
project viability
Institutional arrangements
Key technical
risks
Environmental
Appraisal
 Technical solutions impact on
environment
GHG Screening
Risk Categorization
Identify impact indicators
Impact mitigation measures
Environmental impact matrix
Project impact rating
|
5
As an infrastructure DFI, the DBSA promotes responsible investment
through application of best practice principles in its investment decision
making. The DBSA integrated appraisal module takes into consideration:
The International Financial Corporation (IFC) Sustainability Framework
Socially Responsible Investing
The United Nations Development Programme’s (UNDP) Principles of Good Governance
The International Organization for Standardization (ISO) 26000, and
The Integrated Reporting Committees Framework for Integrated Reporting
Mainstreaming of gender and marginalised groups
The King III Report on Corporate Governance and
Compliance with national legislation / regulations including the South African Companies Act
(2011), the Public Finance Management Act (PFMA) (2012 ), the Municipal Finance
Management Act (MFMA) (2003).
DBSA commitment to sustainability principles is evidenced by DBSA accreditation to various
international sustainability initiatives. The DBSA is accredited as a national project agent of
the Global Environment Facility (GEF).
|
6
DBSA Social and Institutional analysts provide social and institutional
assessment services for all proposed investment projects / programmes.
Depending on the nature and type of project being assessed, the social
assessment would address:
• Level of community
mobilisaton
• Level of community
organisation
• Stakeholders groups
legitimacy
• Level of representation
• Forms of representation
• Legitimacy of
spokespersons
• Forms of communication/
feedback
• Project impact on affected
parties
• Project impact on
beneficiaries
• Readiness of community to
receive a project
• Positive impacts
• Negative impacts
• Mitigation
• Positive impacts
• Negative impacts
• Mitigants
• Social stability – violence,
crime, employment
• Willingness to pay
|
7
The DBSA utilises a Development Results Template (DRT) to capture the
development results of the Banks activities and enable reporting on DBSA
development activities. The DRT serves to:
Evaluate the development effectiveness of the DBSA’s operations;
Facilitate reporting on the results of DBSA operations;
Enable the DBSA to balance financial and developmental
imperatives;
Ensure that the DBSA is able to maximize the development
effectiveness and impact of its funding operations and interventions
and
Measure ability to achieve its targets and deliver on the DBSA
mandate.
To enable effective development reporting, the DRT indicators are to form part of the
Reporting Conditions of all loan agreements with potential DBSA clients
|
8
Presentation presented by:
Mohan Vivekanandan,
Group Executive: Strategy,
DBSA
|
8
Appendix
APPENDIX – DBSA Projects
| 16
Metropolitan Municipality: City of Tshwane
Heartherly/Mamelodi Electrification
Project
Description
The project involved the
construction of a substation
designed to provide a firm
capacity of 105 MYA at 11 000
volts. Heatherly substation will
receive its electricity supply
from the City of Tshwane
Metropolitan Municipality's 132
kV distribution network until a
new 132 kV power line is
constructed from the Njala 132
kV infeed.
Development
Impact
•
•
Project
Status
•
The project provided access to
electricity to over 1,000
households
49 job opportunities were
created during construction, 33
of which were unskilled and 41
were female labourers
The project is complete and
has been commissioned
| 17
Metropolitan Municipality: City of Tshwane
Babelegi Bulk Water Supply
Project
Description
The scope of the project
consisted of the construction of
a 15 ML reservoir, water tower
and pump-stations on the
existing Babelegi reservoir site.
The scope of works also
included the replacement of the
corroded sections of the supply
pipeline from the Temba Water
Purification Plant.
Development
Impact
•
•
Project Status
•
The project has improved the
quality of water and provided
access to 15k households in
the Hammanskraal area.
It created 145 jobs to skilled,
semi- and unskilled
individuals.
The project is complete and
has been commissioned
| 18
Market 3 Municipality: Thulamela INEP Programme
Pictures
ELECTRIFICATION OF TSHIDZINI VILLAGE (110 HOUSEHOLDS)
| 19
Education: University of KwaZulu
UNIVERSITY OF KWAZULU 4 YEAR CAPITAL
DEVELOPMENT PROGRAMME
A 4 Year Capital Development Programme (R450 million) for the
University of KwaZulu Natal was approved in July 2010.
An element of the overall Infrastructure Programme was for
Health Sciences facilities. R40 million of the DBSA Loan was
used to supplement the grant funding of R261 million from the
Howard Hughes Foundation and the Universities own funds to
complete the construction of the KwaZulu Natal Research
Institute for Tuberculosis and HIV (K-RITH) Building on the
grounds of the Nelson Mandela School of Medicine at the
University of KwaZulu Natal in Durban.
The K-RITH building was completed in 2012 at a total cost of
R346 million. The building is a seven story 4000 square meter
medical research building. The facility includes Biosafety level 3
laboratories, which are able to cope with pathogens that cause
TB and Aids. Approximately 10 K-RITH research groups conduct
research in the building.
| 20
Energy: Jeffrey’s Wind Farm Project
Project
Description
•
•
•
•
Jeffreys Bay Wind Farm is a 138 MW wind
project.
One of the largest wind farms in South
Africa (with 60 wind turbines erected on 3
700 hectares)
It is located between the towns of
Jeffreys Bay and Humansdorp, in the
Kouga Municipality in the Eastern Cape
Project Size: R2.9 billion
• Debt: R2.2 billion (72%)
• Equity: R0.8 billion (28%)
Project
Investors
•
•
•
•
•
•
•
Globeleq
Mainstream Renewable Power
Old Mutual
Thebe Investment Corporation
Amandla Omoya Trust
Enzani Technologies
Usizo Engineering
Local/South African ownership : 41%
Project
Lenders
(Debt
providers)
•
Development Bank of Southern Africa
(“DBSA”)
Barclays Africa/Absa
Liberty Group Ltd
Sanlam Life Ltd
Sanlam Credit Conduit (Pty) Ltd
•
•
•
•
| 21
Energy: Jeffrey’s Wind Farm Project
DBSA Role in
the Project
•
•
Senior Lender: R825 million
Empowerment/Equity Funder (to facilitate the
acquisition of equity shareholding by BEE Investors)
 Thebe Investment Corporation: R68.2 million
 Amandla Omoya: 45.7 million
 Usizo Engineering: R15.2 million
 Enzani Technologies: R15.2 million
Project Status
•
The Project reached commercial operation date (i.e.
completed construction) on 15 May 2014.
Benefits
(electricity,
carbon
emissions,
water savings)
•
•
•
•
•
Expected Electricity Production: 460 000MWh/annum
Provides power to 100 000 Households per annum
Annual carbon emissions avoided: 420 000 tonnes
Project lifetime carbon emission avoided: 8 400 000 tonnes
Water savings: 590 000 000 litres per annum
Development
Impact
•
6% ownership by the Amandla Omoya Local Community
Trust (i.e. this exceeds the minimum ownership threshold of
2.5%)
A % of project revenues has been allocated to be spent on
socio economic and enterprise development programmes
(“SED” and “ED”), over and above the Local Community
Trust ownership.
80% of the allocated budget from SED and ED will be
focused on education support programmes.
•
•
| 22
Energy: Khi! Solar One Concentrated Solar Power Project
Project
Description
•
•
•
Khi! Solar One Concentrated
Solar Power Plant is a 50 MW
solar project.
The tower plant will be located on
a 600 ha site close to Upington, in
the Northern Cape Province.
Project Size: R4.1 billion
• Debt: R2.7 billion (65%)
• Equity: R1.4 billion (35%)
Project Investors
• Abengoa (Spanish Company),
• Industrial Development Corporation,
• !Khi Local Community Trust
Local/South African ownership : 49%
Project Lenders
(Debt providers)
•
•
•
•
•
•
Development Bank of Southern
Africa (“DBSA”)
Sanlam Credit Conduit (Pty) Ltd
International Finance Corporation,
Industrial Development Corporation,
European Investment Bank (“EIB”),
Praparco & FMO
| 23
Energy: Khi! Solar One Concentrated Solar Power Project
DBSA Role in
the Project
•
Senior Lender: R500 million
Project Status
•
The Project is currently under
construction
Benefits
(electricity,
carbon
emissions)
•
Expected Electricity Production: 172
000 MWh/annum
Provides power to 37 400
Households per annum
Annual carbon emissions avoided:
183 000 tonnes
Project lifetime carbon emission
avoided: 3 660 000 tonnes
•
•
•
Development
Impact
•
•
20% ownership by the !Khi Local
Community Trust Local Community
Trust (i.e. this exceeds the minimum
ownership threshold of 2.5%)
A % of project revenues has been
allocated to be spent on socio
economic and enterprise
development programmes (“SED”
and “ED”), over and above the Local
Community Trust ownership.
| 24
Transport: A Re Yeng Tshwane Rapid Transit Project
| 25
Transport: A Re Yeng Tshwane Rapid Transit Project
•
•
•
•
•
A Re Yeng is one of 12 cities’ Bus Rapid
Transit (“BRT”) projects approved via
government’s Public Transport Strategy
& Action Plan to improve access and
quality of public transport;
Tshwane Rapid Transit (Pty) Ltd (“TRT”)
is a bus operating company set up in
terms of National Land Transport Act
(“NLTA”) to operate the BRT in the City
of Tshwane (“CoT”);
TRT to be owned by the incumbent taxi
and bus operators in CoT;
Key positives included:
• Established bus operating
company;
• Effectively utilised existing taxi
association structures to facilitate
negotiations.
DBSA approved R488 million for TRT to
fund the acquisition of 171 buses in a
R786 million transaction co-funded with
HSBC Bank Plc
•
•
•
•
•
•
Support of Integrated Rapid Public
Transport Networks, part of national Gvt’s
Public Transport Strategy, a key social
initiative;
Correct socio-economic impact of poor
historic spatial planning;
Improved quality of life through a safe,
affordable, reliable, efficient and integrated
transport system;
Economic growth of R271m through
investment in marginalized areas and
R822m in provincial capital formation;
1,002 new direct jobs to be created from
bus project as well as 11,000 from
construction of required supporting
infrastructure;
R161m household income and R85m fiscal
impact.
| 26
ASIDI 49 Schools – Eastern Cape
Mahahane
SPS (before)
Mahahane
SPS (after)
| 27
ASIDI 22 Schools - Mpumalanga
Goba PS (before and after photos)
Loding PS (before and after photos)
| 28
ASIDI 50 Schools – Eastern Cape
Langeni SPS(before and in
construction photos)
| 29
Doctors Consulting Rooms Programme
4 ROOMED UNIT
| 30
Clinic Facilities Refurbishment Programme
BEFORE
AFTER
BEFORE
AFTER
| 31