Issued by: Ministry of Finance
MINISTRY OF FINANCE
PRESS RELEASE
TUESDAY 6 FEBRUARY 1996
MINISTER OF FINANCE SIGNS GUARANTEE AGREEMENT FOR LOANS FROM THE EUROPEAN INVESTMENT BANK
The Minister of Finance, Mr Chris Liebenberg, today signed a Guarantee Agreement on behalf of the South African Government with the European Investment Bank (EIB). The EIB's counter-signatory was Dr Rudolf de Korte, Vice President of the EIB, and the signing took place in Cape Town.
This Guarantee underpins an infrastructure global loan to the Development Bank of Southern Afrity, valued at ECU 30 million (ZA0 million) to part-finance smalland water provision projects in s is the first foreign loan acceste on infrastructure provision. The Development Bank will be usins line of credit to on-lend to imuch sewerage and water provision This loan forms part of a wider package of potential assistance agreed to between the Government and the EIB in September last year, valued at ECU 300 million (ZAR 1,4 billion) for loans to part-finance specific investment projects agreed to by Government.
The Development Bank, which is currently undergoing a restructuring process, will draw down the loan once it has been officially relaunched later this year. The agreement allows for the credit to be drawn down within a period of two years in up to ten flexible tranche sizes at either a fixed or variable interest rate. The terms of the loan are not concessional, but compare favourably with those applicable to AAA rated institutions. Repayment of each tranche will commence within 5 1/2 years of disbursement and will be repaid, semi annually, over a period of 15 years in the same currency.
This loan, and another smaller one to the Industrial Development Corporation are the first financing agreements reached between the EIB and South African parastatals under last year's Framework Agreement between the EIB and the Government.
Enquiries: Dr Elias Links Jennifer Wilson Department of Finance Ministry of Finance 012 315 5562 012 323 8911