The eThekwini Municipality is looking to raise an additional R1 billion to fund capital projects in the City during the 2018/19 financial year.

According to the municipality this is necessary to ensure that its service delivery programme is not disrupted or postponed.

In an executive committee meeting held last month the municipality tabled a report outlining the process to issue a Request For Proposal (RFP) inviting tenders for the provision of long term debt finance for the amount of R1 billion to finance the Municipality’s Capital Budget for the financial year 2018/19.

Following through to get the loan

Deputy City Manager of Finance Krish Kumar told the Executive Committee that this was a loan budgeted for the 2018/19 financial year which was approved in the City’s budget earlier this year in May. This was the following through on the processes to acquire the loan, he said.

“This will not be the last time the Executive Committee will be hearing about the loan. Once it is advertised it will come back to the Committee in January and again in May.

“There is a need for this loan, if we don’t take it we will have to reduce capital expenditure. We only borrow for capital expenditure, nothing else,” he explained.

Attracting investors with improved infrastructure

He added that the loan will be spent on infrastructure including upgrading substations and networks to ensure a stable supply of electricity to residents.

He said growth in certain areas also necessitated the need to spend on water, electricity and sanitation infrastructure expenditure.

“This is what the loan will be spent on. We are trying to grow the economy and the rates base is not growing as much as we would like. We are trying to grow the economy by attracting potential investors but we can’t do this without improved infrastructure,” he concluded.