PRESS RELEASE

19 March 2011

 Reinforced European financial commitment to South African water sector

Three European development finance partners and the Development Bank of Southern Africa (DBSA), with a strong track record of supporting water projects in South Africa, have agreed to finalise negotiations to support the Mooi-Mgeni water supply project in KwaZulu-Natal. The European Investment Bank, Agence Francaise de Developpement and Germany’s KfW have jointly agreed to enter the final stage of negotiations to provide loan funding of EUR 195 million (approximately ZAR1.8 billion), to the Trans-Caledon Tunnel Authority. A Financing Protocol and a Memorandum of Understanding were signed by representatives of the financial institutions and James Ndlovu, Chief Executive Officer of the Trans-Caledon Tunnel Authority in the presence of South Africa’s Minister of Water and Environmental Affairs Edna Molewa .

The Mooi Mgeni water project will supplement the yield of the Mgeni System, one of the three systems supplying water to approximately 6.3 million people living in the municipalities of Ethekwini, uMgungundlovu and uMsunduzi in KwaZulu-Natal. The project comprises construction of the Spring Grove Dam on the Mooi River at Rosetta in the KwaZulu-Natal Midlands, and a conveyance system to transfer water to the Mgeni River catchment. Once constructed, the project will provide an additional 60 million cubic metres a year, address water delivery backlogs, and improve the security of supply.

The Mooi Mgeni project is the first time the three institutions have streamlined financial cooperation under their Mutual Reliance Initiative intended to enhance the efficiency of large scale development finance projects.  The total cost of the project is ZAR 2.2 billion, approximately EUR 229 million. The project will be co-financed by the European Investment Bank, the French Agency for Development and the German KfW,  that are all public development finance institutions that implement the European Union’s, French Government’s and German Government’s respective development policies. The Mooi Mgeni project will also be supported by ZAR 250 million from the Development Bank of Southern Africa (DBSA).

The Trans-Caledon Tunnel Authority (TCTA), a state-owned entity specialized in water management and responsible for bulk raw water implementation in South Africa, will be in charge of the project under the authority of the South African Department of Water Affairs. Water access and supply is one of the priorities of the South African Government.

The Development Bank of Southern Africa is a DFI operating in the SADC region. It contributes to sustainable development by mobilising financial, knowledge and human capital to support Government and other development role- players in improving the quality of life of people in the region through funding infrastructure projects; accelerating the sustainable reduction of poverty and dependency; and promoting broad-based economic growth and regional economic integration.

Since 1995, the European Investment Bank, AFD and KfW have supported South African economic growth by funding large infrastructure programs, such as this bulk water project, which are key to improving quality of live and economic development in South African.

Media contacts:

·         European Investment Bank: Richard Willis, Tel: +352 621555758, Email: willis@eib.org, www.eib.org

·         AFD: Assia Sidibe, Tel: +27 11 540 7104, Email: sidibea@afd.fr, www.afd-afriquedusud.org

·         KfW: Dr. Jochen Meyer_Lohmann, tel. +49 69 7431 3856, email: jochen.meyer-lohmann@kfw.de; www.kfw-entwicklungsbank.de

·         DBSA: Lucy Chege, DBSA Divisional Executive, tel. +27 11 303  3822, email:lucyc@dbsa.org,www.dbsa.org