DBSA raises $255mn, in new syndication deal

The Development Bank of Southern Africa (DBSA) has made headlines with the announcement of a groundbreaking syndicated facility worth $255 million. The facility, the first of its kind to be accessed by a South African parastatal, was jointly led by Standard Bank and UAE-based Mashreq. This move is part of DBSA's strategy to diversify its global investor base and enhance its funding capabilities. Zodwa Mbele, Chief Financial Officer of DBSA, and Zen Dlamini, Head of Public Sector at Standard Bank Corporate and Investment Banking, joined CNBC Africa to discuss this significant development. Mbele highlighted the significance of this deal, emphasizing the strength of the partnership between DBSA and Standard Bank. She noted that the transaction was oversubscribed, showcasing investors' strong interest in DBSA as an asset. Despite facing challenges in South Africa's economic landscape, DBSA remains a unique and attractive investment opportunity. The funds acquired through this facility will be used to advance DBSA's development mandates by providing funding to clients in the region. Mbele explained that the bank focuses on lending to clients outside South Africa, particularly within the sub-Saharan region, utilizing dollar and euro facilities. Additionally, DBSA has a history of raising capital in various markets globally, demonstrating its commitment to diversification and sustainable funding practices. As the announcement coincides with the COP28 conference on climate change, there is speculation that some of the funds may be directed towards climate finance. While DBSA is involved in climate change facilities, Mbele emphasized that sustainability has always been a priority in the bank's infrastructure financing. The capital allocation will align with DBSA's commitment to funding environmentally-friendly and resilient assets. In terms of the payment terms and cost of the facility, Mbele reiterated the importance of cost-effective funding with a meaningful tenure. The confidentiality of the cost was noted, highlighting DBSA's focus on affordability for borrowers. With a preference for long-term funding to match infrastructure project timelines, DBSA aims to ensure that the borrowed funds are sustainable and impactful. Zen Dlamini of Standard Bank emphasized the significance of this syndication deal, signaling a new era of collaboration between South Africa and the UAE in the banking sector. The partnership between Standard Bank and DBSA is set to open doors for future collaborations, showcasing the potential for more deals in the pipeline. Dlamini expressed confidence in the partnership's success and hinted at future endeavors to strengthen ties between the UAE, GCC, and Africa. Overall, the syndication deal represents a milestone for DBSA and Standard Bank, setting a precedent for future financial partnerships and investment opportunities. As global economic dynamics continue to evolve, strategic collaborations like these will play a crucial role in driving sustainable development and growth across regions.