DBSA in R2bn fillip to small power producers

THE Development Bank of Southern Africa has set aside R2bn to fund small, independent power producers for this financial year.

It forms part of the state’s drive to bolster black industrialists.

“We have set aside R2bn for the first 200MW dedicated to smaller independent power producers,” CE Patrick Dlamini said on Friday following the release of the bank’s annual results.

The DBSA could do more by creating more than 500 industrialists over the next three years, he said. But the bank would minimise its equity investments, valued at about R5bn, as it wanted to be more of a developmental debt funder.

Its equity exposure includes companies such as the One & Only Hotel in Cape Town; Ohorongo Cement in Namibia; and Proparco, a private sector financing arm of the French Development Agency.

But some of the bank’s equity investments were holding up capital that it wanted to invest elsewhere, Mr Dlamini said.

The bank is setting up a capitalmanagement division that will be critical in ensuring that resources are deployed efficiently.

In the results presentation, Mr Dlamini said the bank was looking to disburse about R17bn in loans in the 2015-16 financial year and R22bn for the next.

In the year ended-March, the bank’s development loans, bonds and equity investments disbursed amounted to R13bn compared to R12.7bn last year.

The lending was slowed down by a delay in the closure of projects.

The bank reported a 54% increase in its net profit to R1.2bn. Its provision for bad debts rose 23.4% to R2.9bn.

Finance Minister Nhlanhla Nene said he would have liked for the bank to pay the government a dividend, but understood it needed to use its capital to fulfil the developmental needs in its mandate.

Bank nonexecutive chairman Jabu Moleketi said its performance should be measured by the efficacy of its development influence.

The work it carried out to improve societies should be viewed as a developmental dividend, Mr Moleketi said.

In 2013, the bank was in a lossmaking position but swung back to being a financially sound institution following a restructuring process.

It spent R600m in the 2013-14 financial year buying out some former employees who were on postretirement medical aid benefits, Mr Dlamini said.

The bank could create more than 500 industrialists