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The Development Bank of Southern Africa (DBSA) announced a R205 million combined Integrated National Electrification Programme frontloading loan facility (INEP frontloading loan facility) to fast-track implementation of the electrification projects.
The project will ensure that 14 000 households in rural communities have universal access to electricity in Matatiele, Mbizana, Thulamela and Umzimvubu municipalities, respectively.
INEP frontloading loan facility is a joint initiative between the DBSA and the Department of Energy (DoE), supported by National Treasury. It will allow low capacity municipalities to secure loans or access bridging finance against their conditional grants as security to expedite quick turn-around times in the implementation of the electrification projects. Through this initiative, most of these projects would be delivered ahead of their scheduled completion dates ranging from six to nine months, resulting in cost savings for the municipalities.
The General Manager for Infrastructure Finance and Capacity Support at the DBSA, Mr. Chucheka Mhlongo said INEP frontloading loan facility forms part of the DBSA's strategic intervention to accelerate infrastructure delivery in low capacity municipalities where there are capacity constraints to deliver projects on time. This intervention is not only limited to funding but also aims to provide these municipalities with planning and full implementation support of these projects.
"Following the restructuring and approval of the Bank's new strategy geared to grow a focused, sustainable and developmental organisation, investments that support electrification programmes, particularly in low capacity municipalities have been prioritised as an important focus area to unlock infrastructure backlogs", he added.
Like all other low capacity municipalities in South Africa, these municipalities have their own unique infrastructure backlogs; however, they have a common highest number of households with no access to electricity. As a result, the Bank has pledged to approve an additional R374 million facility in its 2013/14 financial year, to continue with the connection of 20 500 households in Limpopo, Eastern Cape and Kwa-zulu Natal, respectively
The Integrated National Electricity Programme forms part of government's plan to accelerate and eradicate electricity backlogs to meet the 2015 millennium development goals.
"We are delighted to partner with these municipalities, DoE and Eskom in our quest to eradicate infrastructure backlogs aimed at accelerating universal access to electricity, particularly to the rural communities. This signifies the Bank's commitment to contribute towards the development of social infrastructure in all municipalities, which is much needed to improve the quality of life of millions of South African citizens", he said.
News date: 12/11/2013