BDC asked to review proposed P1.1bn investments
Pauline Dikuelo | Friday October 7, 2016 16:14
The Parliamentary Committee on Statutory Bodies and State Enterprises declared this week their dissatisfaction with investments that the corporation intends to undertake with the funds, adding that they should rather consider developing niche sectors that really need help.
The corporation is currently seeking government guarantees for a P850 million loan already approved by the African Development Bank and another P150 million, which it plans to raise through a local bond issuance. The corporation wants the guarantees to fund several investments it says are in its “immediate” pipeline and which it says will create 1,300 jobs.
Speaking on behalf of the Committee, Ndaba Gaolathe questioned the managing director, Bashi Gaetsaloe over what the corporation is trying to achieve in terms of financing businesses. “Looking at the portfolio of the businesses that the corporation has invested in, what are you trying to achieve in terms of financing businesses because some of these projects can penetrate the African markets without BDC’s help?” Gaolathe asked.
In response, the MD said they have been investing in companies that have shown the potential to expand into other markets noting that they also ensure that they do not compete with commercial banks.
“We have been trying to disinvest in companies that are mature. There is already a high threshold from potential investors.”
According to the MD, they will use P280 million of the money for the expansion of an automotive plant that is expected to create about 200 jobs.
“The plant will be dealing with electrical harness for cars like BMW, Chrysler just to mention a few. We had identified South Africa as one of our markets and also exploring other markets,” Gaetsaloe said.
He said the country needs to diversify and become an export-led economy noting that the corporation is beginning to create a model aimed at ways in which the country can compete internationally.
BDC also intends to spend P45 million on a dairy project in Lobatse, P200 million for the expansion of Ba Isago University as a way of resolving the puzzle of skills mismatch.
About P250 million will be used to invest in Letshego, P270 million to fund a private estate in Francistown, P30 million on moving a paper production company to do its operations in Botswana.