The Development Bank of Southern Africa (DBSA) and the City of Tshwane on Thursday signed a R1.6-billion long-term loan facility to support the City’s capital expenditure programme.

This facility aims to accelerate the eradication of backlogs in water and sanitation, roads, electricity and housing related infrastructure, as well as to support the City’s growth and development initiatives.

Supporting municipalities to deliver socio-economic infrastructure remains an important focus area for the DBSA to address the country’s triple challenges of high unemployment, poverty and inequality.

The Bank participates in public bond issuance programmes and other funding, including project finance, to accelerate the delivery of social and economic infrastructure, such as the Bus Rapid Transport system in Metropolitan municipalities.

City Manager Jason Ngobeni said the facility will be utilised to aggressively fast track the City’s Infrastructure Capital Programme designed to match the long term assets to be created.

“This is the inaugural 20-year loan tenure for the City, which remarkably coincides with the celebration of the country’s 20 years of democracy.

“This level of capital investment in the City was, in part, necessitated by the need to improve the enlarged infrastructure of the City, which now includes the erstwhile municipalities of Metsweding, Nokeng Tsa Taemane and Kungwini.

“In this financial fear, 37% of the capital programme is funded through long-term borrowing and the rest being from capital grants and internal resources,” he said.

DBSA Group Executive for South Africa Financing Division at the DBSA, Tshokolo Nchocho, said the facility forms part of the DBSA’s continuous and accelerated support to municipalities in eradicating infrastructure backlogs.

Like many other metropolitan municipalities in the country, the City has its substantial infrastructure backlogs, which create challenges in facilitating and increasing access of basic services to its constituencies, particularly those in the previously disadvantaged areas.

“We are pleased to be part of this capital expansion programme, which signifies the Bank’s commitment to contribute towards the development of social and economic infrastructure in the City of Tshwane, which is much needed to improve the quality of life of its 2.9 million residents.

“In ensuring that metropolitan municipalities remain the heartbeat of the country’s economic growth, the DBSA has therefore embarked on a process to package a comprehensive support programme aimed at addressing each metro’s unique requirements while at the same time ensuring that the Bank delivers on its development mandate,” he said.