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Cape Town - The City of Cape Town has received the final drawdown of a R2.38bn credit facility agreement with the French Development Agency‚ securing a “favourable” rate of less than 6%.
The money will be used to fund part of the city’s capital budget for the next two years and help it pay for infrastructure projects in line with its integrated development plan.
The French Development Agency‚ a financial institution‚ is the main implementation body for France’s official development assistance to developing countries and overseas territories. It finances projects‚ programmes and studies through grants‚ loans‚ guarantee funds and debt-reduction development contracts.
According to the city‚ the average interest rate for the loan‚ which is repayable over 15 years‚ is a “very favourable” 5.7619%. It said this was lower than the South African market rate and close to the country’s inflation rate‚ “made possible by the City of Cape Town’s reputation for sound financial management”.
The Democratic Alliance-led city administration prides itself on its financial management and service delivery‚ though the African National Congress in the council has often questioned these claims.
Municipal authorities say the interest rate is fixed and the amount is denominated in rand. “The city does not have any foreign-currency risk exposure on this loan.”
Ian Neilson‚ deputy mayor and mayoral committee member for finance‚ said: “As an administration‚ we are always cognisant of the fact that we are dealing with public money. We have to manage our finances as prudently as possible and with as broad a vision as possible.
“With this rate in place our residents can rest assured that they are getting more bang for their buck.”
Neilson said the loan would be used for infrastructure projects including the expansion of Cape Town’s electricity‚ water and sanitation systems and the MyCiTi bus services to Mitchells Plain and Khayelitsha. It will also help construct community facilities such as clinics‚ parks and libraries in previously disadvantaged communities.
“The loan enables the city to accelerate service delivery and continue to be the leader in service delivery across SA‚” he said. “It will go some way towards helping us build a Cape Town that truly is a safe city‚ an opportunity city‚ a caring city‚ an inclusive city and a well-run city for all the people who call Cape Town home.”
Earlier this year‚ the city was awarded a €19m (R228m) Orio grant by the Dutch government. Orio is a grant facility for infrastructure development‚ financed by the Dutch ministry of foreign affairs‚ that helps governments in developing countries boost infrastructure developments in partnership with the international business community.
The money will be used to fund part of the city’s capital budget for the next two years and help it pay for infrastructure projects in line with its integrated development plan.
The French Development Agency‚ a financial institution‚ is the main implementation body for France’s official development assistance to developing countries and overseas territories. It finances projects‚ programmes and studies through grants‚ loans‚ guarantee funds and debt-reduction development contracts.
According to the city‚ the average interest rate for the loan‚ which is repayable over 15 years‚ is a “very favourable” 5.7619%. It said this was lower than the South African market rate and close to the country’s inflation rate‚ “made possible by the City of Cape Town’s reputation for sound financial management”.
The Democratic Alliance-led city administration prides itself on its financial management and service delivery‚ though the African National Congress in the council has often questioned these claims.
Municipal authorities say the interest rate is fixed and the amount is denominated in rand. “The city does not have any foreign-currency risk exposure on this loan.”
Ian Neilson‚ deputy mayor and mayoral committee member for finance‚ said: “As an administration‚ we are always cognisant of the fact that we are dealing with public money. We have to manage our finances as prudently as possible and with as broad a vision as possible.
“With this rate in place our residents can rest assured that they are getting more bang for their buck.”
Neilson said the loan would be used for infrastructure projects including the expansion of Cape Town’s electricity‚ water and sanitation systems and the MyCiTi bus services to Mitchells Plain and Khayelitsha. It will also help construct community facilities such as clinics‚ parks and libraries in previously disadvantaged communities.
“The loan enables the city to accelerate service delivery and continue to be the leader in service delivery across SA‚” he said. “It will go some way towards helping us build a Cape Town that truly is a safe city‚ an opportunity city‚ a caring city‚ an inclusive city and a well-run city for all the people who call Cape Town home.”
Earlier this year‚ the city was awarded a €19m (R228m) Orio grant by the Dutch government. Orio is a grant facility for infrastructure development‚ financed by the Dutch ministry of foreign affairs‚ that helps governments in developing countries boost infrastructure developments in partnership with the international business community.
