The Development Bank of Southern Africa (DBSA) is offering to play a greater role in the feasibility assessments of infrastructure projects the government undertakes across all sectors — as it did in some of the country’s electricity reforms.
DBSA chief economist Zeph Nhleko told Business Times the bank can support the infrastructure goals of finance minister Enoch Godongwana’s budget by establishing and managing project management offices.
“We set up the Independent Power Producers Office (IPPO) a while back, around 2010-2011. That has proven to be a very useful platform for renewable energy participation, where private producers bid and similar processes occur,” he said.
“So along similar lines, we’re arguing that we should do that for the water sector — which is why we have the water partnership office here on behalf of the water department, and we’re arguing the same for the transmission network that we all know.”
DBSA reported in the financial year ending March 2025 that its:
- total assets increased by 2.3% to R120.9bn compared to R118.3bn in the same period in 2024;
- total development loans and development bonds decreased by 0.5% from R115.2bn to R114.6bn; and
- total disbursements increased by 2.9% from R17bn to R17.5bn.
Nhleko said IPPO had a good system, but it remained difficult to evacuate energy from one region of the country into the grid, and therefore an independent transmission office along the same lines as the IPPO would be a key intervention.
Ideation is fine, listing them and identifying them is fine — but you need to prepare them, do the feasibility studies and see if these projects are viable. That’s quite key
— Zeph Nhleko, DBSA chief economist
“Transnet is [also] trying to bring private participation into its operation in rail and ports. That project management office is here, and we co-ordinate it here to try and support that exercise to create a platform where they can build and participate and so on.”
He said he was confident DBSA could find a role in the credit guarantee vehicle proposed in Godongwana’s budget.
“If you look at that infrastructure book, for example, you will find that the bulk of these projects listed there still need a lot of preparatory work to be done. So listing them there will not entice investors to come through, because the first question they’ll ask is whether this project is bankable and ready. And often these projects are not ready.
“So ideation is fine, listing them and identifying them is fine — but you need to prepare them, do the feasibility studies and see if these projects are viable. That’s quite key. So if you could do something like that for the country at all levels of government — in a proper, co-ordinated, seamless system — that would be quite key.”
Responding in writing to a question in parliament by Joe Maswanganyi, chair of the standing committee on finance, Godongwana said the national and provincial treasuries review the level of investment in infrastructure maintenance and the implementation of municipalities’ asset management plans.
“Some of the measures include guiding municipalities to develop asset management plans to address infrastructure maintenance backlogs and supporting them in the development and implementation of the local government infrastructure delivery management system and the metro trading services reform.”
Nhleko said municipalities are monitored on their planned maintenance performance through the National Treasury’s monitoring tools and are given cautionary feedback when gaps are identified.
“All these initiatives are intended to improve asset management practices and lifecycle maintenance planning in municipalities while ensuring revenues are reinvested into infrastructure maintenance and renewal.”
We’re seriously losing a lot of revenue: 40% of our water is treated, but it doesn’t reach our households and offices. So I think the first place that we will have to look into is the losses that we’re encountering
— Arthur Quphe, Council for the Quantity Surveying Profession president
Arthur Quphe, president of the South African Council for the Quantity Surveying Profession, told Business Times water infrastructure in South Africa would become a more prominent priority, as the region is water-stressed and subjected to climate variation, rapid urbanisation, and deferred maintenance on existing water infrastructure.
“We’re faced with high non-water revenue [pressures]. It’s above average, globally, because we’re sitting at about 40%. And I think that’s where we’re seriously losing a lot of revenue: 40% of our water is treated, but it doesn’t reach our households and offices. So I think the first place that we will have to look into is the losses that we’re encountering.”
Speaking at the Africa Gas Forum in Cape Town this week, mineral resources minister Gwede Mantashe said as the conflict between the US and Iran continues, South Africa should be uncompromising about investing in oil and shale gas exploration and supporting infrastructure.
“On shale gas, we concluded a seismic survey in the Central Karoo last month, thus improving our geological understanding of the basin. Once the requisite regulations are promulgated, we stand ready to lift the moratorium to unlock the full potential of our basins.”
Oliver Naidu, president of Vopak South Africa, said the country needed at least three liquefied natural gas (LNG) import terminals to support its gas strategy. While Richards Bay was a considerable project, more capacity was needed from projects like the Zululand Energy Terminal (ZET).
“The [ZET] will be the first LNG terminal in South Africa, and we‘re going to put that in Richards Bay. Being the first, it’s going to set momentum for development in the country, which is aligned with the policy of the Integrated Resource Plan 2025.”
Naidu said the ZET joint venture between Vopak and Transnet Pipelines was a critical project to ensure energy security in the future, as coal plants are decommissioned and the 2028 gas cliff draws closer.
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