DEVELOPMENT BANK OF SOUTHERN AFRICA

Transcription

1 DEVELOPMENT BANK OF SOUTHERN AFRICA

2 CONTENTS OVERVIEW OF THE DBSA 01 DBSA INTEGRATED VALUE PROPOSITION 02 PERFORMANCE OVERVIEW AND DEVELOPMENT IMPACT 03 OUTLOOK 04 PARTNERSHIPS 05

3 Overview of the DBSA 3

4 DBSA Mandate Vision: A prosperous and integrated resource efficient region, progressively free of poverty and dependency Mission: To advance development impact in Africa by expanding access to development finance and effectively integrating and implementing sustainable development solutions Geographic mandate: DBSA s primary market DBSA s main focus outside of SA + Rest of Africa Priority Sectors: Primary Secondary Energy Transport ICT Water and sanitatio Health Education 2

5 DBSA s Corporate Structure CEO Chief Investment Officer Infrastructure Delivery (IDD) Treasury & Balance Management Chief Risk Officer Financing Operations Corporate Services Chief Financial Officer Coverage Project Preparation Financing/ Transacting 3

6 DBSA Integrated value proposition 6

7 Integrated Product Suite End to end Integrated infrastructure suite, from pre feasibility through finance, to implementation 1 Plan 2 Plan Project Preparation 3 Prepare Financing 4 Build DBSA primary focus area 5 Maintain / improve Services/products Municipal assessments Infrastructure plans Advisory role infrastructure planning 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 Managing the design and construction of key projects in the education, health and housing sectors Project Management support Supporting the maintenance and/or improvement of key infrastructure projects Clients South Africa Under resourced municipalities South Africa Municipalities SOE PPP Private sector Rest of Africa SOE Public Private Partnerships Sovereigns South Africa Municipalities SOE PPP Private sector Rest of Africa SOE Public Private Partnerships Sovereigns National and provincial government departments Municipalities National and provincial government departments Municipalities 4

8 Project Preparation PPFS Infrastructure Investment Programme for South Africa AFD DBSA Project Preparation and Feasibility Study Fund Funding Partners: European Union, KfW, AFD & EIB. Co funding of EU grants with loans from DFIs to support national and regional infrastructure projects. Enabling the implementation of NEPAD projects SADC Project Preparation Development Fund Funding Partners : European Union and the German Government, through KFW. Project level preparation activities, e.g. technical assistance, feasibility studies, and capacity training. DBSA Project Preparation Fund Provide early stage risk capital to prepare infrastructure projects until bankability 8

9 DBSA Infrastructure Investment Sector Project Name Description South Africa Tshwane Bus Rapid Transit Project Ilanga CSP1 project ethekwini Metro Northern /Western Aqueducts Programme Integrated Mass Rapid Public Transport Network which includes rail, taxi and bus services 100 MW concentrated solar power (CSP) plant, with a capacity to store energy for 4.5 hours A bulk potable water pipeline to connect inland bulk supply system to water treatment works Ravinala Airport Madagascar Rehabilitation, upgrade, expansion, operation and maintenance of the airports Africa Ithezi Thezi Zambia 120 MW Hydropower Generation project Cenpower Ghana 340MW Cobnied cycle gas/liquids power plant 6 6

10 Development Outcomes- Infrastructure Financing Municipal (South Africa) Energy Water Rehabilitation of roads Sanitation Includes upgrading of substations and electrification of households total households impacted: Includes reticulation and provision of bulk water) total households impacted: Total households impacted: 842 Includes reticulation, upgrading and construction of waste water treatment works) total households impacted: Non municipal (South Africa and SADC) Energy generation Education Transport ICT Gas: nil MW [2016: 225 MW] Coal: nil MW [2016: 65 MW] Renewable [solar IPP]: 20 MW Total project impact: 20 MW Student accommodation: beds Total project impact: beds Bus Rapid transit: 210 buses Total project impact: 210 buses Fibre optic roll out: 564 km Total project impact: 564 km 7

11 Qualifying Bulk Infrastructure 11

12 Infrastructure Delivery and Project Implementation Support Implementation Agent Services Management of the design, upgrades, refurbishment maintenance of social infrastructure projects Programme Management Services Provision of management and specialist expertise to support planning, design, budgeting, execution and maintenance of infrastructure projects and programme Education Infrastructure: Packaging low cost semi private schools in underserved areas co funded by government through DBSA and the private sector Expansion of preparation, lending and construction and maintenance of student accommodation facilities Sanitation facility upgrades in rural schools Donor implementing agent for donor funded school infrastructure delivery Health Infrastructure: Packaging of low cost semi private Primary Health Care Facilities, Acute semi private hospitals facilities in underserved areas Packaging and funding Public Private Partnership for Public Hospitals Municipalities lending and implementation of clinic building/refurbishment 8

13 Climate Mitigation Green Fund DBSA manages the Green Fund on behalf of Department of Environmental Affairs Provide catalytic finance to facilitate investment in green initiatives Green Climate Fund DBSA is accredited to GCF Support innovative and risk sharing projects that contribute towards low carbon and climate resilient development Global Environmental Facility DBSA is accredited with GEF as National Project Agency (NPA), funded by UNFCCC (World Bank as trustee) Implementation of climate change & biodiversity projects contributing to global environmental priorities International Development Finance Club DBSA is a member of the IDFC, a network of 23 national, regional and international development banks, committed to promoting low carbon and climate resilient futures 13

14 DBSA performance overview and development impact 14

15 DBSA In RENEWABLE ENERGY INDEPENDANT POWER PRODUCER PROCUREMENT (REIPPP) A programme developed to channel private sector expertise and investment into grid-connected renewable energy in South Africa. There have been notable improvements in the economic development commitments, primarily benefiting rural communities The Department of Energy (DoE), National Treasury (NT) and the Development Bank of Southern Africa (DBSA) established the IPPPP Office The IPPPP Office provides the following services: Professional advisory services; Procurement management services; Monitoring, evaluation and contract management services Private sector investment totaling R192.6 billion committed (total project costs) for IPP development in BW1 4 of which R53.2bn from foreign financiers 92 projects will generate MW 1.2 mn households powered job years DBSA funded over 16 projects in Rounds 1,2&3 to the value of R7Bn R19.1 billion of projected revenues accrued over the 20 year project operational life toward Socio-economic and enterprise development (SED) initiatives Debt Equity Share of total project cost, Rbn Domestic Foreign Major debt providers in REIPPP Rounds 1,2,&3, % 64% DFIs Comm. Lenders 31% 5% Debt Equity Life Funds 30

16 DEVELOPMENT IMPACT FROM FINANCING ACTIVITIES 16 Impact of municipal funding* Estimated Number of household benefitted, 000 Transport Electricity Water Roads Sanitation Residential Facilities Impact of non-municipal funding for 2017 (South Africa) Energy Generation Renewable (solar IPP): total project impact of 100 MW Education Student accommodation: total project impact of beds ICT Fibre-optical rollout: km Transport Bus Rapid Transit: total project impact of 210 buses *Estimated at time of 2016/17 commitments Impact of Rest of Africa (excluding RSA) funding for 2017 Energy Generation Energy: total project impact of 760 MW Electricity meters: total project impact of meters Transport Kilometres of rail: total project impact of 425 kilometres of rail

17 BENEFITING COMMUNITIES WITH NEW AND IMPROVED INFRASTRUCTURE Plan 17 ASIDI: Phase II 12 schools completed. >4 200 learners benefited from the completion of the schools 10 schools in various stages of construction Additional work completed 49 KZN storm damaged schools refurbished during the year 25 schools completed phase 1 (fencing) Town library was completed in Ekurhuleni Metro Municipality Before Eastern Cape Housing Programme 198 houses were brought to practically completion stage by year end 597 households benefited from houses completed Additional work completed 144 houses completed in Germiston Social Housing After Health Programme Clinic facilities maintenance in NHI districts 4 NHI clinics were practically completed by year end VCT II clinic construction 21 clinics have achieved practical completion 266,000 people benefited Additional work completed 6 Limpopo storm damaged clinics refurbished during the year 3 new clinics completed in Ekurhuleni Metro Municipality

18 The DBSA IS MANDATED TO PROMOTE ECONOMIC DEVELOPMENT AND GROWTH 6 Before After

19 DBSA role in Local Government 19

20 Key Issues in Local Government Source: National Treasury Spatial fragmentation and low density settlement patterns that: Deepen inequality and exclusion Constrain productivity growth Weaken fiscal sustainability while current programmes deepen the fiscal challenge through addressing symptoms not causes Expanded investment in core infrastructure to support: Inclusive densification in targeted urban integration zones Universal access to basic services Asset refurbishment and replacement Deeper access to private financing needed to expand resources available for investment through: Longer tenure debt, broader participation (institutional market) and innovation in financial instruments Less reliance on grants 20

21 Key Issues in Local Government Rapid urbanization and human settlement infrastructure challenges Spatial fragmentation and low density settlement patterns Debt burden of municipalities to bulk service providers Inadequate, inconsistent and uncoordinated state support for: Municipal long term financial management plans Infrastructure investment planning Poor financial management capacity in many under resourced municipalities Municipal infrastructure programmes delivered by private sector and non municipal entities Diminishing technical capacity to implement and supervise projects 21

22 Key Issues in Local Government Inability of Metros to spend their full capital expenditure budget Inefficient use of the capital expenditure budgets by municipalities Small number of municipal borrowers Only a limited number of secondary cities come to market Lack of infrastructure planning capacity Insufficient implementation skills and capacity Sustainability of jobs created through projects 22

23 Perfect Storm: Declining Income & Rising Service Delivery Needs Unemployment increasing Negative consumer sentiment Inability and reluctance of consumers to pay for services Most protests are the result of service delivery issues Percentage Consumer debtors as a percentage of own revenue (%) Source: SACN CoJ CoCT eth CoT Eku NMB Man BCM Number of municipal protests per year 23

24 SA s Cities (Metros and Intermediate cities) Have the Potential to Drive Growth and Create Jobs GVA rates have been declining since 2007 SA population increasingly urban-based due to rapid urbanisation Metro populations grew by 1.9% since 2003 But lack of spatial integration Infrastructure under more pressure 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% GVA annual growth rates (%) City of Cape Town Ethekwini Ekurhuleni City of Johannesburg Nelson Mandela Bay City of Tshwane Mangaung Buffalo City Source: DBSA - IHS Global Insight Actual capex vs budgeted capex 2014/15 to 2016/17 (R bn) Budget Actual Budget Actual Budget Actual 2014/ / /17 Source: DBSA Analysis Grants Borrowing Own Revenue However, most municipalities dependent on grant funding No economic base Lack of capacity and capability Fiscal effort Grants are targeted mainly for: Inclusion of the poor Improving financial position Support operational performance 24

25 DBSA Loan Book by Sector R75.7bn Sectoral analysis (%) Commercial - fund Commercial - manufacturing Commercial - mining Commercial - tourism Commercial - other Comms and transport infrast. Energy - electricity Energy - non-grid standalone HR development Institutional infrast. Residential facilities Roads & drainage Sanitation Social infrast. Water Source: DBSA Annual Report

26 5-year evolution of DBSA Loan Book R75.7bn 30.0 Loan book (R bn) per client classification 2013 to NPL s (%) per client classification 2013 to Educational Inst Local Gov. Educational Inst Local Gov. Priv Sector Int. Public Utilities Priv Sector Int. Public Utilities We love municipalities at DBSA Most municipalities do pay Don t lend to vulnerable municipalities without helping them Help vulnerable municipalities to become well-run Hold the hand of municipalities that get into trouble 26

27 DBSA: Our New Approach to Local Government Municipalities that can borrow (metros and intermediate cities) Differentiated Financing Solutions o Credit Enhancements structures: e.g. Guarantees o Securitisation o Large Urban Centre Infrastructure (LUCI) o Supporting private sector and non-municipal entities to deliver municipal infrastructure Facilitation of growth strategies with private sector o Housing Development Agency (HDA) Programme: Rehabilitation of Distressed Mining Towns Catalytic Projects Specialized planning and project preparation services Municipalities with potential to borrow within 3 5 years (intermediate cities) Municipal Support Services o Revenue Enhancement Programmes o Long term financial strategies and investment plans for targeted municipalities MISA/DBSA/NT/DWS Reticulation Programme North West Water and Sanitation Programme Specialized planning and implementation services resulting in Municipalities unlikely to borrow within 5 10 years (under-resourced municipalities) Partnering with government and government entities o Operation Amanzi o o o o North West - Water and Sanitation Programme Infrastructure Planning Support Project Preparation Support Project Implementation support for projects funded by Government Financing through frontloading conditional grants Increased number of infrastructure plans which is linked to infrastructure development. Increased number of projects referred for preparation support. Increased value of catalytic funding unlocked resulting from DBSA lending and non-lending support. Improved spending of conditional grants and loans in municipalities. Increased value of identified projects from DBSA supported Infrastructure Plans that are prioritized in Municipal IDPs. Increased number of DBSA-funded projects completed. Increased development results. 27

28 OUTLOOK 28

29 THE DBSA WILL TARGET R100 BILLION p.a. IN INFRASTRUCTURE SUPPORT BY Total Infrastructure support, R billion Planned 2019 Planned 2020 Planned

30 STRATEGIC SHIFT REQUIRES 30 DBSA s five-pronged strategy for impact Plan Prepare Project Preparation Invest more in early-stage project development; crucial bottleneck in infrastructure New infrastructure programmes Take lessons from REIPPP programme and apply to other sectors in SA and in rest of the Continent Structured products Develop new funding structures to crowdin private sector investors Maintenance of public infrastructure Support government to manage existing infrastructure Partnerships Leverage expertise and balance sheet of our partners to have a greater impact

31 Through Partnerships We Will Achieve More Together Competitor and Partner segment Sector Offering to clients Challenges and opportunities for collaboration RSA commercial banks Metros Secondary Municipalities Balance sheet lending Basel III - <10yr tenure Financial support Crowding in (Catalysation) Develop lending mechanism to combine commercial banks and DBSA lending (longer tenure) Global DFIs KfW, AfDB, EIB, IFC etc Metros Secondary Municipalities Project planning Project preparation Implementation support Mainly project specific lending Increasingly doing general purpose loans National Treasury Metros Secondary Municipalities Under resourced Municipalities Grants to municipalities Project planning Project preparation Collaborate to support local government BEPP process Implementation support COGTA, DOE, DWS, MISA, International donors and Organisations Metros Secondary Municipalities Under resourced Municipalities Grants to municipalities and provinces Project planning Project preparation Collaborate to support local government Bulk infrastructure: Water; Electricity; Sanitation Implementation support Institutional investors Metros Secondary Municipalities Under resourced Municipalities Bonds Crowding in (Catalysation): Guarantees; Pooled finance Lengthening tenor; increasing number of issuers; off-balance sheet instruments (Revenue & TIF bonds); 31 market making?

32 WHO ARE OUR PARTNERS??? 1 NATIONAL (RSA) 2 REGIONAL (AFRICA) 3 GLOBAL 32

33 Thank You 33