DBSA to revive infrastructure

Johannesburg - The Development Bank of Southern Africa (DBSA) will renew its focus on lending to infrastructure sectors, CEO Patrick Dlamini said on Monday.

The need for infrastructure finance in South Africa and the rest of the continent meant the bank was considering an expanded role, he told reporters in Rosebank.

It would seek to move beyond just a "municipal finance" institution to a broader infrastructure finance institution.

"The National Treasury... approved a R7.9bn recapatilisation facility over a period of three years... to support the DBSA's refocused mandate to drive its infrastructure funding by increasing municipal lending, state-owned enterprise infrastructure plans, regional lending and private/public partnerships," said Dlamini.

Over the years the scope of DBSA, particularly in the non-financing areas such as policy, research, agency administration, advisory and capacity support, had grown substantially, he said.

"The bank needed a repositioning to do more in the core area of infrastructure finance," Dlamini said.

Questions were then raised whether DBSA was not overreaching and over-stretching itself in these areas. "Over the years, the scope of sectors covered by DBSA had progressively increased, and therefore could well be overlapping with the mandates of other development finance institutions," he said.

The board reviewed the bank's focus and a restructuring exercise officially started in September 2012.

A series of meetings were held with employees and that culminated in a new growth strategy which was approved by the board in November 2012.

Key focus areas of the bank's new growth strategy were to:

  • significantly increase the quantum of lending to infrastructure sectors;
  • maintain its presence in the metropolitan market while seeking to significantly increase its activities in medium and low capacity municipalities, state-owned entities, private public partnerships and the rest of the continent;
  • invest in private sector intermediaries;
  • expand the DBSA's role in infrastructure delivery and its continued support for the Jobs Fund and Green Fund.
The restructuring process also meant changes in the human resources of the bank.

DBSA then invoked Section 189A of the Labour Relations Act (1995) to formally inform all the employees of its intentions to restructure.

This process was done in consultation with all the recognised unions and non-unionised staff members within the bank, Dlamini said.

The bank introduced a voluntary severance package and early retirement scheme for employees who intended to leave on voluntarily basis and those who were eligible for early retirement.

"The bank also ensured that while it implements the severance package scheme, all essential and critical skills for business are retained," Dlamini said.

The realignment of the operating model resulted in the placement of the new executive team in January 2013.

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