1. MMANNINI ANNETTE MAHLOKO
EXPLORING ALTERNATIVES OF FUNDING FOR INFRASTRUCTURE IN THE ECONOMIC DISTRESS
MMANNINI ANNETTE MAHLOKO

2. Rev. Dr. Mmannini Annette Mahloko
INTRODUCTION
South Africa have a responsibility to invest in its infrastructure.
Needs for infrastructure investment
Solid Level of Population Growth
Resources boom
Competitive in the international market
Maintain the quality of life enjoyed by current and future generations : sustainable economic growth .
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

3. Rev. Dr. Mmannini Annette Mahloko
INTRODUCTION
Grant
More than 80% of ELM infrastructure projects,
Other municipalities depend solely on MIG
South Africa needs the best alternative funding model to ease the burden
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

4. Rev. Dr Mmannini Annette Mahloko
GOVERNMENT FOCUS
National, Provincial and Local sphere of Government focus.
Leveraging government funds with private sector investment.
Efficiency dividend that private sector involvement can bring in project delivery , and
Management and/or from maximising the ability to earn a return on/of investment
Tuesday, May 01, 2018
Rev. Dr Mmannini Annette Mahloko

5. Rev. Dr. Mmannini Annette Mahloko
FUNDING CHALLENGES
Current Funding Structure
Both Private Sector and Government have important roles to play in infrastructure funding
Adequate commercial opportunity
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

6. INFRUSTRUCTURE FUNDING ALTERNATIVES
1. PPP
5. Government Grant
2. Bank Term
Loans
MUNICIPALITIES
3. Project
Bonds
4. Collective Borrowing
Tuesday, May 01, 2018
Rev. Dr Mmannini Annette Mahloko

7. PUBLIC PRIVATE PARTNERSHIP (PPP)
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

8. PUBLIC PRIVATE PARTNERSHIP (PPP)
Public-Private Partnership is governed by chapter 11 of the MFMA,
Supply Chain Management (in part 1) and
PPPs (in part 2).2
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

9. Why PUBLIC PRIVATE PARTNERSHIP (PPP)
A commercial transaction between a municipality and a private party in terms of which the private party:
Performs a municipal function for or on behalf of a municipality, or acquires the management or use of municipal property for its own commercial purpose; or both performs a municipal function for or on behalf of a municipality and acquires the management or use of municipal property for its own commercial purposes.
Assumes substantial financial, technical and operational risks.
Tuesday, May 01, 2018
Rev. Dr Mmannini Annette Mahloko

10. Rev. Dr. Mmannini Annette Mahloko
BANK TERM LOANS
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

11. Rev. Dr. Mmannini Annette Mahloko
BANK TERM LOANS
A term loan is a monetary loan that is repaid over a set period of time.
Usually it involves an unfixed interest rate that will add additional balance to be repaid.
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

12. BANK TERM LOANS BENEFITS
Process easy to facilitate
Quick and easy to secure
Flexible terms
Amortising
Bullet
Term loans usually last between one and ten years, but may last as long as 30 years in some cases.
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

13. Rev. Dr. Mmannini Annette Mahloko
PROJECT BONDS
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

14. Rev. Dr. Mmannini Annette Mahloko
PROJECT BONDS
Open up alternative debt funding avenue
Strict monitoring and disclosures
Higher costs and capital requirement
Institutional investors participate in infrastructure
Tuesday, May 01, 2018
Rev. Dr. Mmannini Annette Mahloko

15. Rev. Dr Mmannini Annette Mahloko
PROJECT BONDS
Instrumental can be fixed or floating
Unsecured
Competitive Pricing
Tuesday, May 01, 2018
Rev. Dr Mmannini Annette Mahloko

16. .Rev. Dr. Mmannini Annette Mahloko
COLLECTIVE BORROWING
Pool Financing
Joint effort by municipalities to lend funding for infrastructure projects.
Joburg,Tshwane, Ekurhuleni Sedibeng, Mgolale City
Tuesday, May 01, 2018
.Rev. Dr. Mmannini Annette Mahloko

17. .Rev. Dr. Mmannini Annette Mahloko
MIG OBJECTIVES
Tuesday, May 01, 2018
.Rev. Dr. Mmannini Annette Mahloko

18. .Rev. Dr. Mmannini Annette Mahloko
MIG OBJECTIVES
■ Fully subsidise the capital costs of providing basic services ■ Distribute funding for municipal infrastructure in an equitable, transparent and efficient manner which supports a co-ordinated approach to local development and maximises developmental outcomes
■ Assist in enhancing the developmental capacity of municipalities, through supporting multi-year planning and budgeting systems
Tuesday, May 01, 2018
.Rev. Dr. Mmannini Annette Mahloko

19. .Rev. Dr. Mmannini Annette Mahloko
MIG OBJECTIVES
■ Provide a mechanism for the co-ordinated pursuit of national policy priorities with regard to basic municipal infrastructure programmes, while avoiding the duplication and inefficiency associated with sectorally fragmented grants.
Provide a mechanism for the co-ordinated pursuit of national policy priorities with regard to basic municipal infrastructure programmes, while avoiding the duplication and inefficiency associated with sectorally fragmented grants.
Tuesday, May 01, 2018
.Rev. Dr. Mmannini Annette Mahloko

20. .Rev. Dr. Mmannini Annette Mahloko
MIG OBJECTIVES
■Provide a mechanism for the co-ordinated pursuit of national policy priorities with regard to basic municipal infrastructure programmes, while avoiding the duplication and inefficiency associated with sectorally fragmented grants.
Tuesday, May 01, 2018
.Rev. Dr. Mmannini Annette Mahloko

21. .Rev. Dr. Mmannini Annette Mahloko
CONCLUSION
■WITH ALL THESE ALTERNATIVE FUNDING MODELS, THE MUNICIPALITIES HAVE A RESPONSIBILITY TO FOLLOW THE PRESCRIPTS TO THE LATER.
Tuesday, May 01, 2018
.Rev. Dr. Mmannini Annette Mahloko

22. Thank You !