Development Bank signs R829m deal with Umgeni Water

The Development Bank of Southern Africa has signed an R829-million deal with Umngeni Water that will see 800 000 households benefiting from improved water access and sanitation facilities.

Umgeni Water is the largest catchment-based water utility in Southern Africa, providing over 300-million cubic meters of water annually to approximately six-million people in KwaZulu-Natal.

The DBSA said in a statement on Monday that the purpose of the loan is to refinance certain of the utility’s short-term debt so as to align its debt maturity profile with the surplus cash generated by operations in the future years after taking operational expenditure and interest costs into account.

The loan application is primarily to “kick-start” a process of balance sheet restructuring, whereby short-term maturity is more closely aligned to future surplus cash flows which have been determined based on current financial and water demand assumptions.

The DBSA’s loan period of 15 years and the resulting asset and liability matching achieved through this loan will ensure greater long-term solvency and sustainability of the business.

DBSA Chairman Jay Naidoo says the programme will not only contribute towards lowering the cost of bulk water, but will also make a significant contribution towards addressing the bulk water infrastructure backlogs in Umgeni’s supply area.

It will also enhance the social and economic development of the population through economic regeneration, which will ultimately increase the demand for bulk water and the sustainability of the Umgeni Water Board, the DBSA said.

The handing over of the Rural Reticulation Schemes to the local authorities, which is currently in progress, will also improve Umgeni’s financial position and business focus.

The loan will furthermore enable the DBSA to monitor and add value to the restructuring process and present the DBSA with the opportunity to cement our

existing partnership with Umgeni.


The purpose of this loan is thus twofold — to improve the overall financial position of Umgeni Water in order to re-engineer its balance sheet, guaranteeing an appropriate asset and liability match now and in the future as well as strengthening the basis for future economic development.

The DBSA is also expected to extend its capacity building and technical assistance facilities to Umgeni through grant funding, it said. – I-Net Bridge

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Advertising

ConCourt settles the law on the public protector and interim...

The Constitutional Court said it welcomed robust debate but criticised the populist rhetoric in the battle between Busisiwe Mkhwebane and Minister Pravin Gordhan

Small towns not ready for level 3

Officials in Beaufort West, which is on a route that links the Cape with the rest of the country, are worried relaxed lockdown regulations mean residents are now at risk of contracting Covid-19
Advertising

Press Releases

Covid-19 and Back to School Webinar

If our educators can take care of themselves, they can take care of the children they teach

5G technology is the future

Besides a healthcare problem Covid-19 is also a data issue and 5G technology, with its lightning speed, can help to curb its spread

JTI off to court for tobacco ban: Government not listening to industry or consumers

The tobacco ban places 109 000 jobs and 179 000 wholesalers and retailers at risk — including the livelihood of emerging farmers

Holistic Financial Planning for Professionals Webinar

Our lives are constantly in flux, so it makes sense that your financial planning must be reviewed frequently — preferably on an annual basis

Undeterred by Covid-19 pandemic, China and Africa hold hands, building a community of a shared future for mankind

It is clear that building a community with a shared future for all mankind has become a more pressing task than ever before

Wills, Estate Administration and Succession Planning Webinar

Capital Legacy has had no slowdown in lockdown regarding turnaround with clients, in storing or retrieving wills and in answering their questions

Call for Expression of Interest: Training supply and needs assessment to support the energy transition in South Africa

GIZ invites eligible and professional companies with local presence in South Africa to participate in this tender to support the energy transition

Obituary: Mohammed Tikly

His legacy will live on in the vision he shared for a brighter more socially just future, in which racism and discrimination are things of the past

The best local and international journalism

handpicked and in your inbox every weekday