Johannesburg - The Development Bank of Southern Africa said on Friday it had extended a R3 billion loan to the Johannesburg municipality and R1.5 billion to Tshwane as part of its support to metropolitan areas with a track record of good corporate governance and financial management .
In a statement, the DBSA said the funding was targeted towards rolling out large-scale infrastructure programmes to accelerate the delivery of services to communities by addressing backlogs, particularly in townships, as well as to rehabilitate infrastructure and invest in growth supporting and revenue generating infrastructure.
These initiatives include the construction and upgrade of electrical, water, sanitation, refuse, road, storm water and human settlements infrastructure projects.
The loans will be repaid over a period of approximately 15 - 20 years.
The DBSA, a government-owned development finance institution delivering developmental infrastructure in South Africa and the rest of African continent in the energy, transport, water and ICT sectors, said critical infrastructure must be urgently rolled out to help address the economic and social challenges exacerbated by the Covid-19 pandemic.
“The DBSA is stepping in to plug market deficiencies as other infrastructure lenders and investors are pulling out of massive capital programmes due to market uncertainty," head of metros at the bank Tshepo Ntsimane said.
"The funding will go a long a way in cushioning the blows and ensuring that municipalities are not interrupted in delivering much needed support to the people of South Africa.”
He said both Johannesburg and Tshwane had demonstrated the capability to service large capital expenditure loans and had the financial, technical and operational resources to implement capital projects.
Preliminary development impact analysis conducted by the DBSA team estimated that from the loans at least 10 000 jobs would be created and about 1 700 youths would become part of the massive infrastructure development programmes in Gauteng province, Ntsimane added.
African News Agency/ANA