The Development Bank of Southern Africa (DBSA) on Tuesday announced that it would inject R205-million into a programme to fast-track the implementation of the electrification of 14 000 households in rural regions.
The Integrated National Electrification Programme (INEP) frontloading loan facility would enable low-capacity municipalities in the Matatiele, Mbizana, Thulamela and Umzimvubu regions to fast-track the supply of electricity to their communities.
The programme formed part of government’s plan to accelerate the eradication of electricity backlogs to meet the 2015 Millennium Development Goals (MDGs).
However, several municipalities continued to have backlogs and that fact meant government would not meet the MDG deadline.
Often backlogs are the result of a lack of “backbone” network infrastructure, escalating costs and limited funding.
During the May Budget Vote, the then Energy Minister Dipuo Peters said KwaZulu–Natal and Eastern Cape continued to have the highest backlogs at 24% and 20% respectively.
Gauteng had a 21% backlog that was largely attributable to informal settlements, many of which were across regions deemed to be uninhabitable by humans.
The DoE had allocated over R3-billion to projects under the INEP during the 2013/14 financial year. The Eastern Cape had been allocated the largest slice of the budget, at R1.1-billion, followed by KwaZulu-Natal and Limpopo with allocations of R793-million and R480-million respectively.
The Free State received R198-million, while Gauteng attracted funding of R270-million. Mpumalanga, the Northern Cape, the North West and the Western Cape were allocated R283-million, R94-million, R413-million and R212-million respectively.
The INEP frontloading loan facility provided by the DBSA enabled the DoE to accelerate infrastructure delivery in municipalities where there are capacity constraints to deliver projects on time, DBSA GM for infrastructure finance and capacity support Chucheka Mhlongo.
The facility, which also aimed to provide these municipalities with planning and full implementation support for these project, allowed low-capacity municipalities to secure loans or access bridging finance against their National Treasury conditional grants as security.
“Through this initiative, most of these projects would be delivered ahead of their scheduled completion dates ranging from six to nine months, resulting in cost savings for these municipalities,” he explained.
The DBSA has committed an additional R374-million facility during the 2013/14 financial year to continue with the connection of 20 500 households in Limpopo, the Eastern Cape and KwaZulu-Natal.