DBSA may turn to multilateral lenders to plug funding gap

The Development Bank of Southern Africa (DBSA) is in talks with multilateral lenders and commercial banks to help plug a funding gap as disruptions in debt capital markets hinder its ability to sell bonds.

The bank needs the extra financing to keep disbursing loans as demand jumps from countries trying to cope with the fallout from the coronavirus pandemic, DBSA Chief Executive Officer Patrick Dlamini said.

Potential lenders include the African Development Bank, the New Development Bank and Agence Francaise de Developpement, he said, without naming the commercial entities. The additional capital will help fund a pipeline of more than ZAR20 billion ($1.15 billion) of deals this year, the CEO said.

DBSA, which has SAR40 billion of debt, last sold bonds at the end of January, when it issued SAR700 million of five- and seven-year floating-rate notes, according to data compiled by Bloomberg.