ANNUAL REPORTS

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Operations overview - South Africa Operations “. . . the Division also helps to alleviate poverty by creating job opportunities . . . ” Luther Mashaba Group Executive Strategic overview Nature of business The South Africa Operations Division supports the development of socio-economic infrastructure by providing financial and non-financial offerings to public sector intermediaries at the municipal and provincial levels. Financial support includes the use of various instruments, such as debt and grants, whereas non-financial offerings encompass project support, advice and development facilitation. These offerings are targeted at provincial departments, municipalities, utilities and a range of other entities, including educational institutions, to assist them in accelerating service delivery to communities. The objective of this support is to achieve social transformation and community upliftment by eradicating infrastructure backlogs, promoting economic development and growth, and developing human resources. The Division accomplishes this mainly by targeting sectors that are national, provincial or local priorities and have the greatest development needs, such as health, education, water and sanitation, human settlements, energy, road transportation and various forms of municipal infrastructure. Through its development support, the Division also helps to alleviate poverty by creating job opportunities, mainly during the construction of the infrastructure but also over its lifespan. In addition, by providing the infrastructure required for service delivery, the programmes and projects supported by the Division increase the number of households with access to basic services. The Division also addresses market failure and institutional weaknesses within the intermediaries. It does so by packaging its products and services in a holistic, integrated and collaborative way, with the assistance of other divisions of the Bank and external development partners in its value chain. The DBSA Development Fund contributes resources towards capacity building and implementation capacity, whereas the Development Planning Division provides market information and development planning interventions. Delivery structure The Division is structured into clusters of provinces. This serves to focus the support the Division provides to meet the development needs of its clients, which differ from province to province in both nature and level of complexity. The Division has three client-facing clusters, through which it serves clients throughout South Africa by developing, packaging, financing and managing infrastructure projects. This differentiation of clients allows for the delivery of tailormade products and services according to specific community needs and functional specialisation. A central portfolio management cluster supports the frontline clusters by coordinating portfolio planning, risk monitoring and reporting in the Division. 40 DBSA | <strong>ANNUAL</strong> REPORT 2010/11
Operating environment Drivers of infrastructure delivery The main drivers of infrastructure delivery are poverty alleviation, the eradication of backlogs and the need for economic growth to reduce unemployment. The provision of socio-economic infrastructure in South Africa remains a critical challenge. There are still huge backlogs in the access to basic infrastructure, as some five million households have inadequate basic services. About half the backlogs are in poorly resourced areas, where around a third of the population resides. In the economic centres of the country, housing needs are the highest priority, while in rural areas the services are all equally undersupplied. This problem is exacerbated by the fact that the main implementers of national government initiatives, namely provincial governments and municipalities, lack sufficient institutional and financial capacity to reduce these backlogs alone. There is thus a strong need for greater cooperation between various players within the development space. To this end, the Division strengthened its links with government departments, municipalities and state utilities in the year under review. Extent of investment requirements and provision Capital expenditure summary 2011 to 2015: Financing requirements and gaps Social infrastructure Main intermediaries: National and provincial government state-owned enterprises, utilities and municipalities Enabling infrastructure Main intermediaries: State-owned enterprises (e.g. Eskom, TCTA, Transnet, ACSA), government and private institutions Economic infrastructure Main intermediaries: Private sector, public-private partnerships and state-owned enterprises • Health • Housing • Education • Municipal infrastructure • Energy • Water • Transport, ports, air and roads • ICT • Entrepreneurial • Agriculture • Mining • Manufacturing • Tourism Planned: R617 billion Financing gap: R419 billion Planned: R883 billion Financing gap: R600 billion Planned: R380 billion Financing gap: R360 billion Asset management • R312 billion maintenance backlog • If R845,6 billion is spent over next five years as planned, operations and maintenance gap will still widen • Estimated operations and maintenance expenditure over lifetime of asset = five times the original asset value • 92% of all South African municipalities spend
Page 1 and 2: A ANNUAL REPORTS 2010/11 DBSA | ANN
Page 3 and 4: BANK Financier, advisor, partner, i
Page 5 and 6: DBSA ANNUAL REPORT CHALLENGES resul
Page 7 and 8: What is the Development Bank of Sou
Page 9 and 10: Financial performance overview 5-ye
Page 11 and 12: “. . . the Bank is harnessing its
Page 13 and 14: 4. Mr ANDREW BORAINE (52) Chief Exe
Page 15 and 16: GOVERNOR‘S FOREWORD 9 DBSA | ANNU
Page 17 and 18: “In line with our renewed compact
Page 19 and 20: The Moses Kotane Community Water Su
Page 21 and 22: LETTERS TO THE STAKEHOLDERS | GOVER
Page 23 and 24: Newly renovated OR Tambo Internatio
Page 25 and 26: “ Economic growth and job creatio
Page 27 and 28: Board, while disbursements yielded
Page 29 and 30: other countries not hard hit by rec
Page 31 and 32: Kuzuku reserve
Page 33 and 34: Estimated impact on household incom
Page 35 and 36: OPERATIONAL REPORTS | development i
Page 37 and 38: Development investment A record lev
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Page 45: Excluding the refinancing of money
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Page 79 and 80: Annual financial statements Content
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Page 85 and 86: Performance information Balanced Sc
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Held-to-maturity financial assets H
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A hedging relationship exists where
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Reversals of impairment An impairme
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1.7 Share capital and reserves 1.7.
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The valuation techniques in (b) and
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1.13.4 Short-term employee benefits
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Notes to the annual financial state
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Investment Banking Treasury Reconci
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4. Financial liabilities by categor
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in thousands of rand 2011 Restated
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in thousands of rand 2011 18. Inves
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in thousands of rand 2011 22. Home
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24. Fair value hierarchy disclosure
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Valuations Land The land constitute
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in thousands of rand 2011 33. Share
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40. Related parties The DBSA is one
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Total 2011 R* 2010 Performance ince
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45. Non-current assets held-for-sal
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1-2 years 2-3 years 3-4 years 4-5 y
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Foreign currency exchange rate (FX)
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1-2 years 2-3 years 3-4 years 4-5 y
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The DBSA has structured the respons
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Note that the contractual liquidity
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(b) Other receivables in thousands
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For the purposes of calulating this
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BACKLOGS Implementer DEVELOPMENT FU
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FINANCIAL OVERVIEW What is the DBSA
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the Department of Rural Development
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“The Fund’s targeted programmes
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6. Mr AnDREw BORAIne (52) Chief Exe
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Managing Director’s report The So
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Managing Director’s report contin
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Divisional executive management 1.
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Operations overview The DBSA Develo
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Corporate governance The DBSA Devel
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Risk management The DBSA Developmen
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FINANCIAL OVERVIEW Annual financial
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Report of the Audit Committee for t
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Directors’ report for the year en
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Directors’ GOVERNOR‘S report FO
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Statement of financial position as
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The goal of sustainable development
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Keiskammahoek
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Sustainability report continued (GR
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234 Notes
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