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DBSA buys R750m Tshwane bonds

Johannesburg - The Development Bank of Southern Africa (DBSA) has bought R750m worth of bonds issued by the City of Tshwane.

The move was aimed at supporting the city's capital expenditure programme to address backlogs in the provision of water, sanitation, roads, electricity and housing, the bank said on Thursday.

"This subscription equates to 35% of the total amount of R2.14bn of the 2012/2013 City of Tshwane borrowing requirements in support of its capital budget," said Tshokolo Nchocho, DBSA group executive of the South African financing division.

The remaining 65 percent, or R1.39bn, would be raised from long-term institutional investors.

"We are delighted 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," Nchocho said.

He said government was planning to invest R1.9 trillion in infrastructure over the next five years.

"This is still not sufficient to cover the total needs, which are estimated at R3.3 trillion," he said.

Nchocho said many of the planned infrastructure investments depended on raising money through various debt and equity instruments to close the funding gap, estimated at R1.4 trillion.

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