The mandate document submitted by the agricultural and agroprocessing sector’s Technical Working Group (TWG), clarifies the core mandates of the sector’s group. This is in line with the Sustainable Infrastructure Development System (SIDS) objectives of facilitating sustainable development.
The agriculture and agroprocessing sector TWG has submitted the mandate document to the Infrastructure Investment Review Committee (IIRC) for adoption and it is currently in draft phase awaiting approval.
SIDS projects single entry point entity Infrastructure South Africa (ISA) formed eight TWGs following the Sustainable Infrastructure Development Symposium South Africa, launched in June last year.
The focus areas of SIDS were divided into eight focus groups, with a TWG set up for the water and sanitation, energy, transport, digital infrastructure, agriculture and agroprocessing, human settlements, social infrastructure and municipal infrastructure sectors.
The SIDS methodology and TWGs assist in mitigating key challenges in the South African infrastructure development environment.
These challenges include improving the quality of business cases to attract fiscus and nonfiscus finance where streamlining processes and procedures are required, as well and technical assistance support for project sponsors.
Additionally, there is a need to increase skills and technical expertise in sponsor offices where long-term upskilling is required. For the overall investment management process, coordination between sponsor and regulators, as well as institutional framework, needs to be strengthened.
The TWG secretariats and their nominated chairpersons help ISA facilitate the development of the country’s infrastructure project pipeline using the SIDS mechanism.
“The core mandates of the agriculture and agroprocessing TWG are agriculture and agroprocessing sector project prioritisation, with recommendations to ISA and IIRC for approval and stage appraisals of private-sector-sponsored business cases (early, intermediate and final), with recommendations to IIRC for gate approval,” says industry association Agri SA executive director Christo van der Rheede.
The mandate includes sponsored private-sector appraisals of business cases to unblock public-sector approval processes and policy matters, with recommendations to IIRC. Additionally, it includes sourcing and assigning project preparation deployments from the ISA Technical Advisory Panel and ISA personnel to project sponsors as and when required to assist in preparing and improving the early business cases, explains Van der Rheede.
He adds that the agriculture and agroprocessing sector TWG also aims to advocate for and facilitate a continuous improvement of infrastructure proposals submitted.
This includes sector proposals that are of a transactional nature during the registration, submission and appraisal phases, as well as the TWG participating in decision-making within the agriculture and agroprocessing sector over projects’ life cycles.
“The TWG appraises infrastructure and transactional proposals submitted by project sponsors from national government, provincial government, municipalities, State-owned enterprises, public entities and the private sector.
“The agriculture and agroprocessing TWG also recommends changes and alterations to be made to the proposals to ensure that proposals are of sufficient quality to attract finance. The TWG will also provide detailed substantive reasons for their recommendation and comments,” says Van der Rheede.
Investment and Projects
The agriculture and agroprocessing TWG has categorised investments and projects into two categories.
The first category is sector-related infrastructure investments such as irrigation schemes, agri-hubs, produce aggregators, storage facilities (silos) and fresh produce markets.
There is also particular focus on irrigation schemes infrastructure to allow for investment in primary agriculture and agroprocessing.
The second category is transactional investments that project sponsors initiate and submit to financing institutions for funding such as the commercial farming sector financing servicer Land Bank, national development finance institution the Industrial Development Corporation of South Africa and commercial institutions.
To determine if a project qualifies as a SIDS project, it has to go through an evaluation process.
As part of the process, projects submitted by various agencies are screened. The feasibility of submitted projects, including financial and economic viability, are appraised and projects are tested for bankability and aptitude to attract finance. The level of preparedness to implement projects is also assessed.
The sources and application of funds and structures are reviewed before the implementation capacity of the sponsors is assessed. The resource availability and quality assessments are then completed. The environmental, social and corporate governance compliance and preparedness of compliance are also evaluated.
Lastly, the developmental impact on communities and gross domestic product is assessed and the appropriate corporate form for investment is verified.
“The SIDS is a platform that brings together critical role-players in the infrastructure investment space who are galvanised around a key goal of accelerating an infrastructure-led economy,” says Van der Rheede.
He adds that the provision of superior-quality infrastructure enables the economy to be more efficient, improve productivity and raise long-term growth and living standards.
Further, gaps in the methodology will be identified and adjustments will be made as and when required.
Additionally, adequate anti-corruption measures will be implemented in an ongoing manner for public-sector infrastructure projects as an integral part of the project management and appraisal process.
“Agriculture and agroprocessing require the right kind of infrastructure investment that will not only contribute to higher long-term growth of the sector but should also address spatial disparities, transform the economy and create much-needed jobs and exports,” Van der Rheede concludes.