The Development Bank of Southern Africa (DBSA) has announced it would help finance the Tshwane and Johannesburg metros to the tune of a R4.5-billion loan.
The loan would see R3 billion go to the Johannesburg metro and R1.5 billion to Tshwane.
The DBSA said these development loans were part of their support to metros “with a track record of good corporate governance and financial management as reflected in both their internal credit rating, audit outcomes and repayment profiles”.
“The funding is targeted towards rolling out large-scale infrastructure programmes to accelerate service delivery to communities by addressing backlogs, particularly in townships, rehabilitate infrastructure and invest in growth-supporting- and revenue-generating infrastructure.
“These initiatives include the construction and upgrade of electrical, water, sanitation, refuse, road, stormwater and human settlements infrastructure projects, addressing service delivery and ageing infrastructure in the respective metros.”
It said the disbursement of these loans demonstrated the DBSA’s commitment to working with metros across the country, to provide much-needed services to both residents and visitors.
The DBSA said the loans were agreed upon to be repaid over a period of “approximately” 15-20 years.
DBSA metros head Tshepo Ntsimane said: “The DBSA made a rigorous committee-based decision and approval-making structures prior to any disbursements. The bank also took into consideration any adverse market and social events that could impact the administration of the loans.
“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.
“The funding will go a long 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 Tshwane and Johannesburg “have 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 held by the DBSA team estimates that from these loans, at least 10,000 jobs will be created and about 1,700 youths will become part of the massive infrastructure development programmes in Gauteng,” Ntsimane said.
The loan for Tshwane comes at a time when a strike by a municipal workers’ union left several parts of the metro without any power for several days, without any refuse being collected and other services, such as water and sanitation, also being impacted.
Residents this week complained to Rekord about being unable to pay their monthly rates due to the strike.
Thaba Tshwane resident Veronica Masilo said they had no electricity for four days. Sunnyside residents have also been without electricity for five days.
Other affected areas include Lynnwood, Garsfontein, Faerie Glen, Silverton, Waterkloof, Mamelodi East and West, Nellmapius, Muckleneuk, Pretoria North and Centurion.
An enquiry has been sent to Tshwane metro on further details of the loan.
This article first appeared on Rekord East and was republished with permission.