Justice Lex Mpati with his assistants Gill Marcus and Emmanuel Lediga at the PIC Commission of Inquiry. Photo: Oupa Mokoena/African News Agency (ANA)

PRETORIA – The Pan African Infrastructure Development Fund (PAIDF) was established to drive former President Thabo Mbeki’s vision of the private sector playing a key role, together with government, by investing in the future development of infrastructure in Africa.

Lebashe Investment Group (Lebashe), Harith Fund Manager (HFM) and Harith General Partners (HGP) director Jabulani Moleketi, on Tuesday, told the Commission of Inquiry into alleged improprieties at the Public Investment Corporation (PIC) that the PlC’s management executive committee, identified Tshepo Mahloele, as the person best qualified to set up the PAIDF, which was intended to be the primary vehicle envisaged in realising the ideal of President Mbeki.

Mahloele, who is a director of Harith and Lebashe, as well as chairperson of Lebashe, said in his testimony before the commission that the decision by the Government Employees Pension Fund to make an investment in PAIDF was entirely independent of the PIC.

Mahloele resigned from his position as head of Corporate Finance and the lsibaya Fund at the PIC in April 2006, in order to take up the task, the commission heard. 

Moleketi said: “With all the necessary legal approvals and in compliance with the requirements of the Public Finance Management Act, a loan of seed capital in the sum of R17 million was made by the PIC to the PAIDF Facilitation Trust so as to permit Mahloele to set up the fund and to attract private sector investors. 

“The seed capital was provided by way of an arm’s length loan, which was repayable in full, plus interest, to the PIC. The amount drawn down on the loan, with certain costs and expenses, was in total just over R225m.” 

Moleketi said in order to attract private sector investment in PAIDF, the fund had to be, and had to be seen to be, entirely independent of government control. 

“This was for a number of reasons … but chiefly that private sector investment generally carries a greater risk factor, hence a greater return on investments; that investments were to be sought across the continent and not limited to South Africa and, most importantly, that the PAIDF was intended to be entirely free of any form of political control or manipulation, a factor which always deters those private sector investors whom Mr Mahloele would need to attract,” said Moleketi.

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