Development Bank of Southern Africa

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Development Bank of Southern Africa
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Select Committee on Trade and International
Relations DBSAs role in facilitating SMME
Development 30 May 2012
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Agenda

• Background and mandate of DBSA
• Development Fund
• Jobs Fund
• Accelerated Schools Infrastructure Development
  Initiative (ASIDI)
• Rural Economic Development Initiative (REDI)

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Background and mandate of DBSA

• The DBSA is one of the Development Finance
  Institutions (DFIs) in South Africa
• Wholly owned by the Government of South Africa
• Shareholder representative is the Minister of
  Finance

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Background and mandate DBSA

• Infrastructure Development Finance in South
  Africa and the rest of the Southern African
  Development Community (SADC)
• Co-deliver social and economic infrastructure
• Build human and institutional capacity
• Promote broad-based economic growth, job
  creation, cooperation, integration and prosperity
• Serve as a centre of excellence for development
  financing, effectiveness and good governance.
• Engender sustainability, external and internal

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DBSA SMME development initiatives

• Although SMME not direct mandate of DBSA, the
  Bank facilitates SMME development through,
  amongst others
• Development Fund
• Jobs Fund
• Accelerated School Infrastructure Development
  Initiative (ASIDI)
• Rural Economic Development Initiative (REDI)

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Development Fund (OM)
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Development Fund Other SMME Assistance
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Development Fund Other SMME Assistance
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Jobs Fund
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Rural Economic Development Initiative (REDI)

• Key element of REDI
• Strategic Choice
• Strong Multi-stakeholder Partnership
• Fast Track Delivery
• Technical Support

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REDI Approach
REDI unlocks finance for catalytic economic
infrastructure projects as well as the
development and implementation of economic
turn-around strategies within areas of economic
potential with the aim of stimulating a
reconfiguration in national and local space
economies in order to foster shared growth and
financial sustainability
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Achievements of REDI

• Cacadu District Municipality
• 50 Catalytic development Projects identified
• 35 provided with assistance
• 15 referred to various financial institution for
  finance
• Potential for R400 million to be invested in
  Cacadu
• DBSA financial commitment of R7.8 million
• R14 million crowded in to co-fund identified
  project

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Achievements of REDI

• Cacadu District Municipality
• Eastern Cape Pineapple Industry in Bathurst
• Beneficiation of pineapple
• High dietary fibre by-product of pineapple
  commercialised
• Team currently converting Pineapple Leaf Fibre to
  Micor-Crystalline Cellulose (MCC)
• Team converting Pineapple Stump Juice to
  Bromelain
• 15 referred to various financial institutions for
  finance
• Successful commercialisation of MMC and Bromelain
  essential for long term viability of Eastern Cape
  Pineapple industry
• Project has potential to create 1000 low and
  semi-skilled jobs (unemployment rate is 76)

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Achievements of REDI

• Theewaterskloof REDI
• 40 catalytic development projects identified
• 15 provided with packaging assistance
• R110 million referred to various financial
  institutions for finance
• R90 million crowded in to co-fund identified
  projects
• 20 new tourism business opportunities created
• 10 new enterprise opportunities indentified

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Achievements of REDI

• Theewaterskloof REDI
• 1133 jobs created
• Unlocked partnerships with
• Stellenbosch University
• The Department of Education (Basic or Higher?)
• PUM mentorship and support programme
• South African Breweries
• Partnership between biking enthusiasts,
  Municipality and Cape Country Meander
• Increased biking track from 200 kilometres (kms)
  to 500 kms
• Leveraged around R500 million in direct
  investment in MRB infrastructure
• Could gain a further R20 million indirect
  investment
• Created 8 enterprise opportunities for trail
  builders, crafters, guides, transport companies
  and service teams
• Created 73 jobs in the tourism value chain

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Achievements of REDI

• Ugu District REDI
• Umzimkulu Sugar Mill reopened
• Partnership between the Department of Rural
  Development and Land Reform and Illovo Sugar
• Entered into a partnership to revitalise small
  grower programmes
• Ugu District Municipality facilitating the
  revitalisation of North Pondoland Sugar Scheme in
  Alfred Nzo District Municipality

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Achievements of REDI

• Ugu District REDI
• 40 catalytic development projects identified
• 21 of these provided with packaging assistance
• 21 referred to various financial institutions for
  funding
• DBSA financial commitment of R7.5 million
• R328 million crowded in to co-fund identified
  projects
• Potential for R2 billion to be invested within
  Ugu

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Achievements of REDI

• Building strong public-public and public-private
  partnerships
• At a strategic level
• At a sectoral level
• At a project level

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Achievements of REDI

• Lessons learnt
• Importance of long term view
• Focus on planning through doing
• Work with a large and diverse portfolio
• Drive process through multi-stakeholder
  partnership approach
• Balance between retaining and growing businesses
• Committed and dedicated champion
• External process facilitation

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Thank you