Brics bank to lend SA $600m more

The New Development Bank plans to lend as much as $600m more in SA in 2018 in an effort to spread funding more evenly across its five member states.

The lender, backed by Brazil, Russia, India, China and SA, started operations in 2015 to support infrastructure projects and sustainable development initiatives in emerging economies. Leaders of the informal Brics club of nations will be gathering in Johannesburg this week for its 10th summit.

“Our aim is to be equitable among our five members,” New Development Bank president KV Kamath said. “If you look at the $4bn we will be doing this year, we should be lending around $800m” in each nation, he said. “I hope this year we will hit that number.”

The bank in May announced a $200m loan to Transnet, the state-owned ports and freight operator, to rehabilitate container terminals in Durban.

It would ramp up efforts to grow sustainable infrastructure in SA with two further loans, Kamath said. One of these would go to a bank, which would in turn lend these funds for use in renewable energy developments, he said.

The second would be made available to critical infrastructure, Kamath said, without giving details.

Separately, the bank last week activated a $180m loan to Eskom that had been dormant since 2016 and which will be used to build transmission lines and a substation in Soweto to integrate renewable energy projects from independent power producers, Anil Sooklal, SA’s Brics ambassador, told reporters in Johannesburg.

Eskom spokesman Khulu Phasiwe was in the dark about the loan, saying: “Anything to do with Eskom’s finances will be revealed during our financial results.”

The utility is due to present its latest results on Monday.

Sooklal also revealed that the Shanghai-based bank would begin raising money and lending in South African rand to help insulate its clients from currency risk. It already does this in China.

“We are trying to catch up with our lending to SA,” he said. “It took us a little time to understand how to go about getting projects in SA, but I think we are slowly going up that learning curve.”

The lender opened the Africa Regional Centre in 2017 to assist in identifying projects in the country it can support.

Kamath said the ascent of Cyril Ramaphosa to the presidency in February, which was followed by changes to the management at some stateowned enterprises, had improved confidence.