DBSA

1. DBSA Ad Hoc Committee: Coordinated Oversight on Service Delivery DBSA Presentation / Submission to Public Hearings 4 February 2010

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5. Land Bank DBSA KHULA IDC NAT. HOUSING FINANCE CORP. Agriculture: onsite Small bus. Development Industrial Development Infrastructure Development Housing Finance 1.1. DFI Landscape • Wholesale development finance institution: • DBSA: part of the family of 5 DFI’s • DBSA’s Primary purpose is to promote economic development and growth, human resource development and institutional capacity building by mobilising financial and other resources from the national and international private and public sectors for sustainable development projects and programmes in South Africa and wider Southern Africa region. 5

6. 1.2. DBSA Mandate, Vision and Mission Vision A prosperous and integrated region progressively free of poverty and dependency Mission The DBSA shall drive development impact in the region through expanding access to development finance and effectively integrating and implementing sustainable development solutions

7. 1.3. DBSA OrganisationalFramework Office of the CEO Governance Key Governance Structures Credit, Finance, Audit, Risk, ALCO, Human Capital, Knowledge Management, Audit, Evaluation, Secretariat DBSA Leadership Group (Exco, MG-Net, MRM) MONITORING / MANAGING DEVELOPMENT RISKS • Institutional & human • capacity failure/weakness Market failure/weakness (key focus areas) SOUTH AFRICAN OPERATIONS DEVELOPMENT FUND INTERNATIONAL DIVISION DEVELOPMENT PLANNING Core operations Development planning Research Policy advisory Siyenza Manje Agencies Services Vulindlela Academy Sustainable Communities Local Economic Development Initiative Financing in South Africa Financing outside South Africa Knowledge & Innovation Strategy Facilities Admini- stration Finance Treasury Risk Human Capital IT Commu- nication Enablers Enabling processes and systems 7

8. 1.4. DBSA’s Response to Development Priorities and State of Readiness 1.4.1. Government Strategic Priorities and Programmes Emanating from the Polokwane Resolutions • Speeding up growth and transforming the economy to create decent work and sustainable livelihoods; • Massive programme to build economic and social infrastructure; • Comprehensive rural development strategy linked to land; • Strengthen the skills and human resource base; • Improve the health profile of all South Africans; • Build cohesive, caring and sustainable communities ; • Sustainable Resource Management and use; • Building a developmental state including improvement of public services and strengthening democratic institutions.

9. 1.4.2. DBSA’s Strategic Five Year Plan • Prioritised support in line with government intervention • Municipal • Health • Education • Rural development • Enhanced access to resources to serve financial requirements for development • Agreement with National Treasury • Five year plan – spelling out priorities • The DBSA’s Five year plan • Dedicated allocation of funding to different markets in support of social, enabling and economic infrastructure • Acceleration of funding to priority areas • Mobilisation of additional resources and funding • Increased partnerships to enhance comprehensive development solutions

10. 1.4.3. Funding Plan for 2010 - 2015 Note: R70bn split as per MOU with National Treasury10

11. 2. DBSA’s DEVELOPMENT STRATEGY AND PLAN AIM AT ADDRESSING THE DEVELOPMENT CHALLENGES AND CONSTRAINTS 2.1. The Development Environment 6 Metros 37% population, 18% backlogs, 23% poverty Under resourced municipalities – 159 30% population, 50% backlogs, 67% poverty Secondary municipalities – 119 33% population, 32% backlogs, 41% poverty Drivers for infrastructure investments • Poverty 40%, Backlogs 22%, Unemployment approx. 20% Social transformation infrastructure: Housing, Education Health, Municipal Enabling infrastructure: Transport, water, energy, communications Economic infrastructure: Agric, Tourism, Entrep. Mining, Manufacturing Infrastructure investment needs Municipalities SOEs Private Sector Main delivery channels Government / DFIs Institutional failure / weaknesses: Capacity and skills Absorption capacity - Revenue Market failure / weaknesses: Funding gap / availability of finance Constraints 11

12. 2.2. Examples of Funding Constraints • Insufficient collaboration and crowding in of funding for development • Uncoordinated investment efforts • Unplanned consequences of regulated environment on funds mobilisation and application • Limited planning and project preparations capacity and funding • Sustainability: Affordability of services by communities and institutions

13. 2.3. Examples of Institutional Impediments • Constraints : Institutional and regulatory environment • Some municipalities that are not viable • Role definitions, functions and mandates • Inability of municipalities to prepare service delivery projects • Credibility of IDP’s • Inadequate performance management of municipal officials and systems • Non compliance of supply chain management and procurement processes • High vacancy rates in key positions • Inadequate budget for operations and maintenance

14. 3. DBSA’s INITIATIVES BASED ON THE FIVE YEAR PLAN3.1. Funding Initiatives South Africa R28.5 billion (R70 billion*) 3.1.1. DBSA Current and Planned Overall Support Rest of SADC R7.8 billion Rest of SADC Total RSA Loan Projections Total RSA Loan Projections Total RSA Loan Projections [Maximum 33% of Risk [Minimum 67% of Risk Capital] [Minimum 67% of Risk Capital] [Minimum 67% of Risk Capital] Capital] Public Sector Intermediaries 77.4% R22.1 billion (R55 billion*) Non government/Private Sector Intermediaries 22.6% R6.4 billion (R15 billion*) Private Sector Public Sector Private Sector Private Sector Public Sector Public Sector Intermediaries Intermediaries Intermediaries Intermediaries Intermediaries Intermediaries Non Municipal Municipal SOEs/other public 25% R5.4 billion (R20 billion*) Municipalities 75.5% R16.6 billion (R35 billion*) Non Municipal Non Municipal Municipal Municipal [Priority Regions] [Priority Regions] [Priority Regions] DBSA Portfolio as on 31/12/2009 * R per five year plan

15. 3.1.2. DBSA Current and Planned Support to Municipalities Metros Under resourced municipalities Secondary municipalities Under Resourced: R 0.7 billion/ 4.4% of municipal book (R7 billion*) Secondary Cities: R 4.7 billion/ 28% of municipal book (R8 billion*) Metros: R 11.3 billion/ 67.7% of municipal book (R20 billion*) Municipalities R 16.6 billion / 75.5% of Public sector book (R35 billion*) DBSA Portfolio as on 31/12/2009 * R per five year plan

16. 3.1.3. DBSA Fund Mobilisation

17. 3.1.4. Specific Support Initiatives to Overcome Funding Constraints

18. 3.1.5. Examples of Key Funding Solutions (a) Targeted Infrastructure Programme (TIP) • The Targeted Infrastructure Programme is a concessional programme started in 2004 to build sustainability through a combination of technical and investment support to poorer municipalities • Strict monitoring arrangements to ensure impact • Package deals with additional technical support to ensure comprehensive development structure

19. (b) North West Sanitation Programme: Phase I – Facility for the Eradication of Bucket Systems and Other Infrastructure

20. (c) Gamagara Municipality, Northern Cape

21. (d) Concept of leveraging MIG to Fast Track Service Delivery • Innovative funding instrument to fast-track the provision of access to basic services to those who do not have access • Leveraging of MIG funding to grant long term concessional funding • Facilitate funding for multi-year infrastructure projects in a shorter cycle than MTEF • Focus: water, sanitation, roads, and electricity sectors • Success dependent on alignment with current MIG policy review • Purpose: Realise latent economic potential through institutional and financial support of declining areas and accelerate service delivery • Improve financial and institutional sustainability for low capacity municipalities

22. Initiatives to built capacity and remove institutional constraints • Dr Paul Kibuuka • Group Executive: Capacity Development and Deployment (CDD)

23. 3.2. Institution Building and Capacity Development Deployments in Sector and Line Departments 3.2.1. Overview of SiyenzaManje Mandate Municipal Deployments Vulindlela Academy Courses Training of Municipal Officials Young Professionals Artisans Grant Funding

24. 3.2.2. National Distribution of Municipalities Supported by SiyenzaManje Municipal funding support

25. 3.2.3. Existing Support Initiatives Assisting Municipalities spend MIG/CAPEX Ensuring completion of Technical infrastructure projects Assist in municipal compliance with MFMA Ensure improved financial management Implementation of Operation Clean Audit Pilot sustainable municipal operations and maintenance programme Pilot engineering services support for waste water treatment works National roll out of Artisan Programme Support local government turnaround strategy

26. 3.2.4. Overview of Siyenza Manje Programme

27. 3.2.5. Number of Officials Trained Through Vulindlela Training Academy Increasing momentum in human capital capacity building

28. 3.2.6. Grant Funding Technical assistance grants by sector and province, 2008/09 28

29. 3.3. Key Initiatives & Partnerships: Policy & Planning • Municipal Infrastructure Investment Framework (MIFF) – In partnership with COGTA / SALGA • Local Government Resource Centre (LGRC) – COGTA / SALGA • Municipal Immovable Asset Management: Asset data and Systems Toolkit (NT, COGTA, DWEA) • Contribution to municipal research and development agenda • Municipal Profiles, Case-studies & other research outputs • Roundtables, Dialogues & Conferences : Developmental State Conference & Knowledge Week Conference • Bi-annual Flagship Publications - Infrastructure Barometer & Development Report

30. 4. CONCLUSION DBSA is well positioned with its strategic partnerships to assist government in • Policy development, information & research ; • Funding & implementation ; • Capacity building.