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Ramaphosa: Govt casting wide net for Infrastructure Fund

Jul 23 2019 20:27
Khulekani Magubane, Fin24

President Cyril Ramaphosa has told Members of Parliament via a written reply that government will not be excluding the China Development Bank from its call for funding to go into government's Infrastructure Fund.

Ramaphosa was responding to a written question from the leader of the opposition Democratic Alliance Mmusi Maimane. Maimane asked whether government would utilise funds from the China Development Bank in its Infrastructure Fund, how much the bank would loan government and the conditions thereto.

The DA has been apprehensive about finding from Chinese institutions and has called for the terms and conditions for a R33.4bn loan to Eskom from the China Development Bank to be made public. Government has maintained that the conditions should remain private.

Ramaphosa said consideration would be given to source funding from a number of international finance institutions, both state-owned and private.

"The Infrastructure Fund is expected to utilise funds from international finance institutions, including the China Development Bank, as well as other development finance institutions and private sector institutions.

"Work on the design of the Infrastructure Fund is continuing, involving the National Treasury, the Development Bank of Southern Africa and the Presidential Infrastructure Coordinating Commission," said Ramaphosa.

Ramaphosa said government committed R100bn to the fund over ten years as a subsidy to leverage both private sector and development finance funding for well planned projects.

"This seed capital will be funded through reprioritisation or additional borrowing but may also include guarantees. There is R5bn in the existing Medium-Term Expenditure Framework for this purpose," Ramaphosa said.

He said the intention of the fund would be to access technical assistance that comes with concessional loans both for purely social infrastructure and for blended finance projects with social and economic elements.

"The decision on the funding mix, and terms and conditions of the loan will be determined by several factors. Therefore, it would be premature to indicate what the loan amount would be and the terms and conditions of the loan," he said.

He said processes to enable borrowing on a competitive basis from multilateral institutions, such as World Bank, New Development Bank, Chinese Development Bank, already existed.

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