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NEWS: Coastal wetlands are unable to adapt to the rate of sea-level rise and are constrained by infrastructure

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Wetlands, precious ecosystems that shield coastlines, safeguard drinking water from saltwater contamination, and nourish diverse wildlife, face a dire threat from the accelerating pace of sea-level rise, driven by global warming. Wetlands have historically adapted to rising sea levels by expanding upward and inland. However, predictions indicate that the waterline will soon shift far too rapidly for wetlands to keep pace. Consequently, future decades may witness the tragic loss of these vital wetland ecosystems. Wetlands along coastlines have historically played valuable roles for people and wildlife, but are now facing the threat of sea-level rise. As temperatures rise, sea levels are rising at an accelerating rate, and wetlands are unable to keep pace by building upward and migrating inland. This is due to human-induced climate change and the burning of fossil fuels, which has warmed the oceans and melted glaciers. Sea levels are now rising at about 10 millimeters per year, and are
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Is the DBSA pivotal to the economic recovery plan?

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State-owned development finance institution Development Bank of Southern Africa (DBSA) is looking to accelerate playing a meaningful role in the economic recovery of the country by assisting in financing and implementing vital infrastructure projects for the transport sector – particularly road development projects.

What is the role of the DBSA in the economic recovery plan?

Bank to play pivotal role in recovery plan

DBSA principal project and infrastructure finance professional Nangamso Matebese-Maponya explains that, owing to the impact of Covid-19 and the supply and demand shocks experienced in all sectors of the economy, globally, the DBSA has also had to follow a flexible approach in terms of financing and implementing roads infrastructure projects in the transport sector.

The DBSA sees roads infrastructure and other transport sector infrastructure as a key area to stimulate economic growth and inclusion. To demonstrate the importance of the transport sector she also highlights that, though the bank’s transport sector exposure is the third highest, after energy and municipalities, the DBSA has made R18-billion available for infrastructure projects linked to the transport sector, which is an increase from R9.9-billion made available last year.

She further points out that, while provincial departments have restrictions in terms of concluding loans to fund road infrastructure projects, the DBSA can explore the use of special purpose vehicle structures and strategies in consultation with the province, as a potential funding solution for infrastructure development.

Asked about the DBSA’s role in government’s infrastructure development acceleration plans and in particular towards economic recovery, Matebese-Maponya points to the launch of the R100-billion National Infrastructure Fund in August this year, which will be managed by the DBSA.

She adds that this fund, through the appointment of Mohale Rakgate as its group executive, demonstrates the DBSA’s intention to support economic recovery through the development of critical infrastructure, including the transport sector.

“There are a number of projects in the fund’s target pipeline, some of which are roads projects.”

Road infrastructure financing does not come without challenges, and some of these, seen by infrastructure financiers, include implementing user-pay models in some instances, as has been seen in the concerns around e-tolling in Gauteng, and the South African National Roads Agency Limited’s (Sanral’s) challenges in collecting revenue from road users. With lockdown regulations further compounding this situation, reducing road use, and traffic volumes, many toll roads have experienced revenue drops.

To help its clients in the transport sector with various other challenges, like the extended construction periods, the DBSA offers longer grace periods and repayment tenors, enabling matching asset maturity profiles to loan repayment tenors.

The DBSA can also explore and offer other products and loan structures, such as mezzanine, equity and sculptured facilities, to cater for these types of long-term developments. These loans generally are tailored to address specific needs in project companies but may attract higher interest rates than senior debt facilities.

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