PRESS RELEASE
AGENCE FRANCAISE DE DEVELOPPEMENT FINANCES MUNICIPALITIES WITH
The DEVELOPMENT BANK OF SOUTHERN AFRICA
Agence Française de Développement Group (AFD and Proparco), the French arm for international
cooperation, signed its commitment of R1.104bn to the Development Bank of Southern Africa (DBSA) at
a press conference at DBSA’s headquarters in Midrand, Johannesburg on November 25, 2009.
This funding will target medium and small municipalities through the DBSA’s Targeted Infrastructure
Programme funding. This will enable municipalities to finance their infrastructure to improve service
delivery and develop economic activities. AFD’s CEO Jean-Michel Severino and DBSA’s CEO Paul Baloyi
were both present at the signing.
“The principal mission of the AFD in South Africa remains the provision of financial support to South
African municipalities to assist them with achieving their basic infrastructure investment programs. The
AFD-DBSA partnership is helping to fulfill this by focusing on municipal financing for municipal
infrastructure and essential services,” explains Severino. “Further, our partnership with DBSA and our
involvement in the SADC is part of our efforts to promote economic integration on the continent.”
AFD has already financed R46.37m (out of a total of R86.11m) to DBSA for a joint feasibility study fund
on regional infrastructure projects. The AFD will also contribute a grant towards the Pan African Training
Academy, a professional training programme in water infrastructure project management.
DBSA provides access to development finance and is involved in integrating and implementing
sustainable development solutions. As the State’s main instrument, it is the biggest lender to local
authorities and provides 60 per cent of loans to municipalities. Its activity consists of financing social
infrastructure and increasingly basic economic services needed for job creation. DBSA also provides
technical assistance via its Development Fund. DBSA is mandated to cooperate in the Southern African
Development Community and hosts the NEPAD Secretariat.
AFD’s views its partnership with DBSA as its most significant. Between 1996 and 2008, AFD issued six
credit lines totaling R2.385bn to DBSA for refinancing social infrastructure around the country. DBSA
holds a 10 per cent equity stake in Proparco, a subsidiary of AFD dedicated to the funding of the private
sector.
The first four credit lines that AFD granted to DBSA has already seen more than 1.5 million people being
connected to the electricity network and over 800 000 to water; 100 000 people benefit from public
works to drain rain water, 65 000 students use infrastructure financed by the Technology Universities
and 400 000 people benefit from municipal primary healthcare infrastructure.
This new partnership commitment between the AFD and DBSA forms part of the R3.5 billions of grants
by AFD in South Africa. These are to The Desmond TUTU HIV Foundation, Transnet, the Development
Bank of Southern Africa, Global Rating, National Housing Finance Cooperation and the Central Energy
Fund. He also visited Capitec Bank and the Airports Company of South Africa.
ENDS
25 November 2009
Issued on behalf of Agence Française de Développement
Release prepared by Siyenza Management
Leigh-Anne Sa Joe
Tel: 011 463 9184
Email: [email protected]
Notes to the editor
1. AFD is a public establishment that has been combating poverty, promoting development and
protecting the environment for over sixty years. AFD’s mandate for economic growth and the
preservation of the environment falls directly within the framework of the UN’s Millennium
Development Goals which seeks to reduce global poverty by half by 2015. AFD supports projects
that improve living conditions, contribute to economic growth and protect the planet: getting
children into school, supporting farmers, supporting small businesses, water supply,
preservation of tropical rainforests, combating climate change. For more information visit:
www.afd.fr or www.afd-afriquedusud.org
2. AFD uses a wide range of financial instruments to underwrite its activities. These include grants,
subsidies, guarantees, loans, equity shareholdings, co-financing and local bank intermediation.