Amid economic headwinds, the DBSA delivered R28bn across the total infrastructure value chain, with development assets now standing at R77bn and total assets at R82bn. 

Salient features of the financial year include:

• Total infrastructure development impact of R28 bn of which

  • R7.6bn approved in project preparation funding;

  • R17.1 bn in total disbursements;

  • R3.3bn in total funds under management for infrastructure delivery.

• Increased support to under-capacitated municipalities, with increased planning and implementation support.

  • 70 infrastructure projects completed in the electricity, water, sanitation, roads and storm water sectors for secondary and under resourced municipalities, benefitting more than 63 000 households.

• 638,000 households to benefit from new or upgraded infrastructure through funding activities

• R3.5bn in disbursements outside South Africa

• DBSA awarded accreditation to the Green Climate Fund, thus enabling access to the US$10 billion committed to this United Nations initiative, which was created to provide funding to projects that invest in low-emission and climate-resilient development.

• DBSA receives two awards from IJ Global for infrastructure finance projects

• Net profit of R2.6bn and sustainable earnings of R1.4bn

• Cost to income ratio improved to  29% from 34%

• Non-performing loan book after specific impairments reduced to 1.1% from previous year’s 1.9%

Speaking at the release of the results, Patrick Dlamini, Chief Executive of the DBSA said, “Despite a challenging operating environment, we delivered a credible set of results in line with our expectations. The need for infrastructure development in South Africa and throughout Africa remains critical and although we were faced with subdued economic environment and falling commodity prices, we at the DBSA remain committed to playing a significant role in ensuring that the country’s infrastructure gaps are met.” 

Continued success in bringing projects to bankability

Over the past financial year, the DBSA’s Project Preparation unit has built on past successes in creating a good investment portfolio.

For the period under review, 13 projects to the value of R7.6bn were approved for funding, up 18% from R6.4 billion in 2015. It is estimated that in excess of R24 billion will be unlocked from third party funders.

The DBSA is currently assessing projects to the value of R216bn, most of which are in the energy and transport sectors.   

New disbursement record set – R17.1billion

The DBSA achieved a new disbursement record of R17.1bn – up 32% from the 2015 financial year with disbursements largely allocated to metros (7.5bn), economic infrastructure sector (R4.9bn) and projects outside South Africa (R3.5bn).

The DBSA continues to play a role in supporting municipalities by providing not only infrastructure financing but planning and implementation support services. “We remain a critical component of the national infrastructure system, contributing to the rollout of government infrastructure programmes and increasing the performance of under-capacitated municipalities,” commented Dlamini.

Impact of Municipal Funding includes:

• R8.1bn disbursed to municipalities, up from R5.5bn in 2014/2015

• R1.2bn in approvals to secondary municipalities and commitments of R546m

• R430m and R173m disbursed to secondary and under resourced municipalities respectively

• 70 projects completed in secondary and under-resourced municipalities in the electricity, water, sanitation, roads, storm water and fleet management sectors.

• Through implementation support, DBSA indirectly contributed to creating 5 240 actual job opportunities

• 63 242 households will benefit from completed and still under construction projects.

Increased progress in infrastructure delivery

The Bank’s Infrastructure Delivery Division (IDD) delivered its infrastructure projects successfully and timeously, playing a crucial role in co-ordinating delivery in key priority sectors such as schools, housing and health facilities.

Highlights of the past financial year include:

• The completion of 35 schools, as part of the Accelerated School Infrastructure Delivery Initiative, benefitting 17 916 learners.

• 1 382 affordable houses completed with more than 4 000 households to benefit from the houses completed.

• 111 health facilities completed

• 665 SMME’s benefitted from construction contracts to the value of R709m, with 6421 jobs created through projects completed by Infrastructure Delivery Division.

• Value of infrastructure delivered increased to R3.3 billion with funds under management from R2bn in the previous year. R2.6bn infrastructure was delivered during the year.

Financial performance

The DBSA delivered strong financial results underpinned by the continued focus on improving margins and cost management. Sustainable earnings improved to R1.4bn from R805m in 2014/15. The bank recorded a net profit of R2.6bn against the R1.2bn in 2014/2015. Sustainable earnings represents profit earned before foreign exchange and certain financial instruments adjustments.

The Bank’s total assets grew by 16% to R82bn, with the total development asset book increasing by 22% to R77bn. The debt/equity ratio of 177.8% remained well below the 250% statutory threshold. Non-performing loans, after specific provisions improved to 1.1% from 1.9% in the previous financial year against a target of 3.3%.

The DBSA also achieved a cost-to-income ratio of 28.7%, against a ratio of 34.4% in the previous financial year.

Outlook

“Although the economic outlook remains uncertain, we believe that as the price of commodities recovers, this will feed positively into our business. The DBSA is therefore well positioned to achieve maximum development impact across the full infrastructure development value chain and will seek to unlock R35bn in infrastructure development in the next financial year.

We believe the DBSA is well-placed to continue its central role as the financial engine room of South African development, and to play a major role in the development of the continent.”