Facilities Secured for Phase 1A                                                             <<..back

Table 1 summarises the total financing costs of Phase 1A of the LHWP.  Provision of advance infrastructure system comprising access roads and accommodation camps preceded construction of the main construction facilities.  Rand (CMA) based facilities were secured to pay the costs associated with these works, mainly because off-shore finance takes a long time to put in place.  These facilities mainly came from the Development Bank of Southern Africa and were guaranteed by the RSA. 

In keeping with the financing strategy, Rand commercial facilities were raised from the local/regional banks to finance all local costs of the major works of the project, whether administration or construction related.  It must be pointed out that a portion of these local facilities turned out to be a long drawn process.  When eventually the foreign loans became effective, the first draw-down was used to reimburse the portion of local facilities that had been applied against foreign costs. 

Much of the foreign finance was raised from the foreign commercial banks, 85% of which was underwritten by the Export Credit Agencies of the countries of the respective contractors, and the facilities. There were instances, however, when more than the required 100% financing was provided in response to the bonus scheme built into the evaluation criteria.

The facilities raised for the Water Transfer Phase 1A component are summarised in Table 2.