ANNUAL REPORTS

Operations overview - South Africa Operations continued
Operations results
South Africa Operations portfolio, 31 March 2011
25
20
15
10
5
0
31 March 2010
Preparation
Negotiation
Implementation
Completed
31 March 2011
R billion
Some of the specific highlights are discussed in more
detail below.
• Investment focus on infrastructure categories
and sectors
The Division sought to balance its support for the different
categories of infrastructure in order to maximise the
development impact of its investment. The multi-sectoral
nature of development requires that investments in social
infrastructure be supported by corresponding investments in
bulk enabling infrastructure and in the development of energy,
water and road networks. Such investments should also be
aligned with those that build the economic sustainability of
an area. The figures below show the percentage value of
disbursements for 2010/11 by client and by sector.
Disbursements by type of client, 2010/11
Loan book Pipeline Loan book
Not disbursed
Disbursed
By the end of 2010/11, the Division’s loan portfolio had
grown to a book debt of R22,7 billion (2009/10: R20,9 billion),
an increase of 8,6%.
The divisional pipeline of new projects was low at the start
of the year, following the high levels of implementation and
disbursements achieved in 2009/10. The Division continued
with normal operations, providing funding to municipalities
mainly through open tenders, but also broadened its
value offerings and client base, and delivered investment
support through technical and financial instruments. Initially,
upward pricing pressures resulted in a low conversion of
approvals to commitments for the highly contested top 40
municipalities that went to market. Nevertheless, significant
progress was made in developing sustainable solutions for
provincial and under-resourced municipal clients.
Metropolitan municipalities 17,6%
Secondary municipalities 29,1%
Under-resourced municipalities 7,5%
Education 11,3%
Non-municipal clients 34,5%
Disbursements per sector, 2010/11
44
The implementation of these strategies generated a pipeline
of over R12,1 billion, which will form the basis of increased
investment levels from 2011/12. The state of the portfolio
per phase of the project cycle is reflected in the figure above:
despite a challenging environment, the total asset base grew
by 9% year-on-year. At year-end, projects in implementation
stood at R4,9 billion, with a further R8,4 billion in various
stages of preparation and appraisal.
The achievements recorded here were made possible
by increased approvals, amounting to R11,3 billion, to a
diversified client base. As most of the approved projects
have a long preparation and lead time, disbursements were
generally low; only R3,1 billion was disbursed over this period.
Still, positive results, such as the reduction of the default
rate noted above, were realised despite difficult economic
conditions.
Social infrastructure 2%
Energy 36%
Transportation 33%
Education 11%
Water 8%
Roads and drainage 6%
Sanitation 4%
DBSA | ANNUAL REPORT 2010/11