The Mercury

Water bodies can seek finance

Umgeni Water and Rand Water given approval by Mboweni to approach banks


If there are any delays in the projects, the

entity should provide reasons for

such delays

RAND Water and Umgeni Water have been allowed by the National Treasury to approach major banks and seek finance for their operations.

This is after Finance Minister Tito Mboweni published in a government gazette amounts the two boards could borrow over three years.

Mboweni authorised Umgeni Water Board to borrow up to R4.8 billion and granted Rand Water a bank guarantee of R45 million.

In a government gazette published last Friday, Mboweni said Umgeni Water could be granted up to R2 billion for the financial year ending June 2020, R1.4bn in June 2021 and R1.4bn for June 2022.

The amounts, Mboweni said, reflected the maximum balance of interest-bearing debt the entity could have as at the end of the financial years. “This means that for as long as Umgeni Water has an interest-bearing debt on its statement of financial position (or balance sheet), it is not allowed to exceed these limits.

“The authorisat­ion expires on 30 June 2022 and a new authorisat­ion will be considered upon expiry, provided Umgeni Water has borrowings recorded in its statement of financial position,” he said.

As part of the conditions for authorisat­ion, Umgeni Water is required to submit quarterly progress reports to the National Treasury asset and liability management division as well as highlight the progress of major capital expenditur­e projects.

Mboweni also authorised that the Rand Water board be given R26.215m and issued bank guarantees of up to R15m limit a year between June 2019 and June 2021.

Rand Water can borrow R6.345m before June 2019, R8.265m June 2020 and R11.605m by June 2021.

Mboweni said the proposed limits on borrowings reflected the maximum balance of interest-bearing debt at any point in time for the relevant period. He said the bank guarantee reflected the maximum bank guarantee Rand Water could source.

He said set conditions for the approval of the bank guarantee for Rand Water also included it submitting quarterly progress reports to the Treasury’s asset and liability management division. “If there are any delays in the projects, the entity should provide reasons for such delays,” he said.

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