Financing

As the DBSA, our primary purpose is to promote economic development, regional integration and ultimately pursue a higher quality of life through infrastructure finance and development. DBSA invests predominantly in South Africa, while 40% of its investment book is geared towards infrastructure in Rest of Africa.  Our client base includes municipalities in South Africa, the private sector, State Owned Enterprises, Sovereigns and public-private partnerships (PPPs) across the continent.

DBSA applies a rigorous credit investment process to select projects that drive the strategic objectives of financial sustainability and enhanced development impact. In addition, DBSA’s financing is guided by our Environmental and Social Safeguards Policy.

With rising government debt levels and ever-shrinking fiscal headroom, DBSA structures products and taps into concessional financing that yields maximum investment. Ultimately these infrastructure builds contribute towards implementing government priorities as depicted by the National Development Plan (NDP) Vision 2030, Integrated Urban Development Framework (IUDF), the African Union’s Agenda 2063, and globally, United Nations Sustainable Development Goals (SDGs).
 

DBSA finances projects in

• Water and Sanitation
• Information and Communications Technology (ICT)
• Energy
• Transport Logistics (Road, Rail, Ports)
• Health
• Education (student housing)
• Housing 

Bespoke Solutions 

In addition to loan financing, DBSA has developed bespoke products that support key initiatives aimed at addressing market failure and benefiting socio-economic inclusivity. These include:

• Equity financing product to facilitate B-BBEE and women-owned entities
  • Most B-BBEE and women-owned promoters lack sufficient equity contribution into the projects to facilitate meaningful participation, yet few projects can sustain 100% gearing. Against this backdrop, the DBSA is committed to supporting projects sponsored by historically disadvantaged individuals by providing equity support.
• Loans Syndication
  • Infrastructure projects require significant capital investments and given the limited risk appetite amongst individual banks to fund an entire debt tranche, DBSA has developed a syndicated loans product to manage credit risk while supporting our clients’ financing needs.
• Non-ECA cover – DBSA will invest into the uncovered portion of an Export Credit Agency-backed transaction, to encourage the financial closure of the commercial tranche of the transaction.
• Credit enhancement (only if competitive) with other DFIs and MDBs
  • First risk loss / subordinated facilities
  • Loan tenor extension - up to 20yrs
  • Guarantee products
  • Capital Payment suspension – due to the heavy upfront building cost required to kick start large infrastructure projects, only interest repayment are made due during build phase