RMBleadsthewayinre-establishingPPPstoboosteconomicgrowthinSA

 

The challenge

Following the impact of the COVID-19 pandemic, rebuilding the economy is critical. One way to rebuild the economy and create jobs is through delivering infrastructure through PPPs. RMB has partnered with government at this time to assist with the funding of infrastructure projects.

 

The RMB solution

The scope of the PPP included applying for funding for construction as well as operational management costs for 25 years for the DALRRD. RMB, as the mandated lead arranger, put together a consortium of companies and provided a 21-year CPI linked debt facility, as well as a vendor loan through a mezzanine tranche to gear the BEE component of this deal. In addition, RMB provided a debt service reserve facility as liquidity assurance, should the project need it. The deal required collaboration internally between the RMB Infrastructure Finance team, the Markets cluster team and Group Treasury.

Proven results

RMB has stayed the course with its partner to ensure the successful conclusion of this PPP — an end-to-end solution that has enabled the DALRRD to achieve significant efficiencies through reduction in their payments. It also now operates from a modern, functional and fully serviced working space, so that it can focus on delivering on its critical mandate. Building maintenance has also been taken care of with a 25-year contract in place. This deal comes at a time where infrastructure development and PPPs are critical to stimulate economic growth and job creation in South Africa. RMB has shown its commitment to making deals of this nature possible despite adverse economic conditions.

Client	Department of Agriculture, Land Reform and Rural Development (DALRRD)
Sector	Infrastructure
Capabilities	PPPs for infrastructure development, Infrastructure finance
RMB's role	Underwriter, mandated lead arranger, lender, facility agent, account bank
Country	South Africa