OVERVIEW OF ANNUAL REPORT PRESENTED TO THE PCOF / NCOP SC Mr. M S V Gantsho (Managing Director and Chief Executive DBSA) PROMOTING SUSTAINABLE DEVELOPMENT BEYOND THE WORLD SUMMIT

Overview The DBSA’s Mandate Sustainable Development DBSA Approach Pillars: Planet Pillars: Prosperity Pillars: People Performance Overview Conclusion

The Mandate of the DBSA Vision is to be a change agent for socio economic development in Southern Africa Contributes to sustainable development by mobilizing resources to build foundations for economic growth and delivery of basic services Plays a triple role of Lender/Investor, Advisor and Partner for development Sustainable Development Impact is the goal of Bank’s operations Financial strength is the means towards this goal

Sustainable Development Historically, the understanding: Focused on saving the earth for future generations Did not emphasise social realities Since the 1992 Earth Summit in Rio, to be sustainable, development must contribute to economic growth, protect and restore ecological systems, and improve people’s lives

Pillars of Sustainable Development Concept has thus come of age, and now rests on three ‘Ps’ Prosperity, i.e. economic efficiency and growth People, i.e. poverty alleviation and betterment of quality of life Planet, i.e. protection and restoration of the ecological systems

The DBSA Approach For DBSA, sustainable development is not just a paradigm or concept, it is a core value system of our business Project appraisal process addresses following dimensions: Economic Social Environmental Institutional Financial Technical Support to clients in removing constraints and enhancing development impact

The Three P’s : Planet DBSA Support Environmental appraisal module not only assesses risks but explores means to mitigate and manage risks Assists borrowers to build environmental management and monitoring capacity Contributes to environmental policy formulation and implementation

The Three P’s : Planet DBSA Support Partnerships to support innovative solutions: Partnership with Eskom : renewable energy demonstration project on DBSA premises Partnership with KfW to test wind energy Agency Agreement with World Bank Prototype Carbon Fund Participation in policy initiatives: Multilateral Financial Institutional Group on harmonisation of environmental guidelines UNEP initiative to develop guidelines on reporting and management for financial sector

The Three P’s: Prosperity DBSA Support All projects must have a positive economic impact: Contribution to GDP Employment Creation Capital Utilisation Income generation by households Overall results for 2001/02: GDP impact: R8,9 billion Estimated 43 000 jobs to be created Estimated contribution to low income households: R1,1 billion For every R1 of DBSA investment, R3,30 mobilised from other sources

The Three P’s: People DBSA Support Bank’s project appraisal addresses four key issues: Quality of life Empowerment Gender equity Human capital formation Impacts measured: Access to basic services Households expected to benefit Economic opportunities Improved health standards Creation of training and employment opportunities (including gender) Involvement of local and emerging contractors

DBSA Performance Overview INPUTS: 2002 2001 Loan approvals 3.2 bln 2.2 bln 45% Loan disbursements 1.8 bln 1.6 bln 13% Grants for capacity building 9.9 mil 5.5 mil 80% Private Sector Projects 1.0 bln 0.5 bln 96%

DBSA Performance Overview OUTCOMES 2002 2001 Value of projects supported R13.5 bln R13.9 bln (3%) Percentage of new investments made inside SA 78% 44% 34% Leveraged funding from other sources for every Rand of DBSA R3.30 R5.30 (61%) Number of Jobs created 43 000 13 200 226% Expected contribution to GDP R8.9 bln R2.1 bln 324% Households expected to be connected to basic services 0.6 mil 1.1 mill (83%) Estimated contribution to income of low income households R1.1 bln R0.3 bln 267% Maintained strong local credit rating (Fitch IBCA) AAA - Improved International credit rating (Moody’s) Baa3 Baa2 Surplus from operations R724 mill R566 mill 28%

Conclusion The DBSA remains on a solid foundation Financial strength Development impact Establishment of dedicated Development Fund that enhance capacity building role Short term strategic thrusts (“quantum leap”) and longer term vision (Vision 2010 significant growth in operations and development impact.

SHUN THE INCREMENTAL GO FOR THE QUANTUM LEAP

www.dbsa.org Thank you! Building foundations for development…….