BDC mounts second bid for P800m loan
Pauline Dikuelo | Friday May 10, 2019 16:53
A previous attempt was rejected after Members of Parliament refused to approve a sovereign guarantee required for the AfDB loan as well as the bond issuance, as Parliament needed more details on the investments that BDC wants to undertake.
BDC’s Head of Corporate Affairs and Strategy, Boitshwarelo Lebang confirmed to BusinessWeek that they have made another application and the process is still ongoing.
“We confirm that BDC has made an application to the African Development Bank (AfDB) for a loan of $80 million for the funding of national development projects,” she said.
AfDB recently announced that their Board of Directors has approved a $80 million line of credit to the BDC to help the country’s industrialisation and regional integration.
According to the Bank, the line of credit will be provided through its private sector window and will be used to finance local companies in Botswana’s manufacturing, transport, logistics and services sectors.
In total, the projects are expected to create between 2,500 and 2,800 jobs, including 1,200 to 1,300 for women, in particular in these sectors.
“The financial support provided by the bank will help mobilise the long-term financing required for economic diversification in the country, with an emphasis on increased exports and creating jobs,” the Bank said.
“The proposed projects will also support regional integration as most of these products and services are exported in the Southern African Development Community (SADC).” As part of raising funds for new projects, BDC has also been divesting from some of its projects and investments. The government’s investment arm has so far sold commercial and residential properties around the country and other companies.
Divestment by BDC is part of its strategy adopted in 2014 in which it said it would sell 12% of its portfolio in ‘matured industries’ and invest in new sectors.
As part of its strategy, the Corporation aims to diversify its funding mix and reduce reliance on shareholder and short-term revolving credit line financing while increasing longer term funding from borrowings.