Speech at the Africa Investment Forum (AIF) Roadshow 2019

Nathaniel Munetsi – Speech at the AIF Roadshow 2019

Introduction

The AIF came at a time where there is increased fiscal pressure in the public pursue, against ever increasing gaps in both economic and social infrastructure – Gauteng Province alone as a infrastructure gap of ZAR 1.7 trillion, while challenges are also evident in other sectors such as energy and transport, where increasing demand, coupled with ageing infrastructure has often led to load shedding and traffic congestion. The challenges are more acute in social infrastructure – health and education.

At the present moment, our focus is on exploring alternative financing mechanisms for infrastructure development. Partnerships with the private sector, leveraging off the private sector’s balance sheet and efficiencies in infrastructure development has been one of our focus areas. However, good ideas and plans are not enough to take us forward. We need partnership with financial institutions to help us realise our dreams. As a result, we are very grateful to the coming in of the AIF to assist with the matchmaking of our infrastructure projects to appropriate financiers.

The role of the AIF as a transaction platform cannot be overemphasized. Last year, at the inaugural conference, as team South Africa, we took 8 projects to Boardroom Sessions and about 30 projects into the Marketplace. The 8 that went into Boardroom Sessions received interest from more than 25 financial institutions, made up of development financial institutions, commercial banks, export credit agencies and institutional investors. 3 of these projects were from the Gauteng Province, with an estimated capital cost of ZAR 25 billion, namely the Kopanong Precinct, Gauteng Schools Programme and the City of Johannesburg Waste to Energy project. The projects received interest for support through a number of instruments, namely equity, concessional loans and credit enhancements. One of the projects, the Kopanong Precinct recently received National Treasury approval to go into the tendering phase.

We continue working closely with the AIF team to help accelerate the projects to reach financial close. Once financially closed the projects will bring a huge developmental dividend in the form of jobs, new infrastructure that meets minimum norms and standards, access to safer learning spaces and environments.

We are glad, this year we will be taking 5 projects into boardroom sessions namely;

– Ekurhuleni & Tshwane Waste to Energy Projects (combined estimated capital of ZAR 15 billion)
– Africa International Food Market ZAR 4.2 billion
– EcoCity in KZN (ZAR 5 billion)
– Housing Fund for Eastern Cape

We are expecting more interest on the projects this year. Most interesting is the innovation that the AIF is bringing to the projects, with elements of blending and some credit enhancements.

Our parting word is that we are very much excited about the AIF and the value addition to our projects. We would require support to do more.

As team South Africa we would like to take this opportunity to express our gratitude to the organisers of the Africa Investment Forum for the role that the AIF is playing in helping to realise our infrastructure development goals.

– Project Preparation Grants/ Early Stage Equity
– Long dated concessional financing
– Credit enhancements

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