Banele Gininza|Published 15 minutes ago
The Development Bank of Southern Africa (DBSA) has confirmed that Moody’s Ratings Agency (Moody’s) has upgraded its long-term foreign currency issuer rating from Ba3 to Ba2.
The bank said this reflects improved funding and liquidity, a sustained strong capital buffer and the ability to maintain low levels of non-performing loans of approximately 3.8% of total loans, despite high asset risks and a weak operating environment.
The bank’s standalone rating was also raised from B1 to BA3, and its long-term national issuer rating was also raised from Aa3.za to Aa2.za.
DBSA Chief Economist and Group Executive for Strategy and Sustainability Zeph Nhleko said the confirmed stable outlook recognizes the strong capital buffers that cushion assets from risks and pressures in the current low economic growth environment. He added that this is consistent with the stable outlook for the sovereign rating, given that DBSA is 100% government-owned.
“Therefore, if the operating environment improves, the sovereign rating is raised, the bank’s funding profile and credit concentration improve, the bank could be further upgraded,” Nhleko said.
Nhleko said the rating upgrade also confirms DBSA’s strong performance in infrastructure development on the African continent, driven by innovative infrastructure projects across the network sector to address investment, growth and unemployment challenges.
“For more than 42 years, DBSA has championed Africa’s infrastructure and capacity building, working with continental and global partners to deliver on that mission. Driving economic transformation and access is a key part of DBSA’s mission,” Nhleko said.
As of the end of September 2025, the bank had supported approximately R43 billion worth of infrastructure development. This includes R11.1 billion in loans and equity, R2.9 billion in facilitated funds, R2.3 billion in infrastructure released for municipalities, R24.5 billion in major projects realized and R2.4 billion in infrastructure delivered.
Nhleko said large-scale projects that DBSA undertakes, often as part of public investment, include the reconstruction of Cape Town’s Parliament House, worth R4.6 billion. A total of R6.8 billion was invested in the construction of Siloam University and Limpopo University mega-hospitals in Limpopo City. The Røywal wastewater treatment plant in Hammanskraal is valued at R633 million. and oversees the R1-billion Northern Cape accelerated housing delivery program in Kimberley and Upington.
“This level of infrastructure support not only contributed to aggregate national capital formation, but also enabled the bank to foster over 12,000 jobs, support black-owned businesses, and allocate 40% of total procurement expenditure to B-BBEE entities, while maintaining an appropriate governance and risk management framework,” Nhleko said.
He added that DBSA is also financing and developing various mega infrastructure projects that will foster growth. These are large-scale, complex initiatives aimed at driving long-term economic development and transforming the economies and societies in which they are located.
“These types of projects, generally categorized in the sectors of water and sanitation, transport, energy, information and communication technology, education, health and social housing, are at the heart of creating jobs, modernizing infrastructure and improving access. There are an estimated 12.4 million people in South Africa who are able and willing to work but are unable to find work. This is a major challenge currently facing our country, and solving it requires greater investment,” said Nhleko.
He said DBSA’s organizational strength is underpinned by its strong governance framework and strict management mechanisms.
“While our people remain our most valuable asset, DBSA is also defined by our uncompromising commitment to strong governance. As Africa’s leading development finance institution (DFI), we maintain a strong framework aligned with international best practices to ensure transparency and accountability,” Nhleko said.
He emphasized that DBSA’s work involves technical and financial partnerships that often take place behind the scenes, with banks acting as funders, advisors and enforcers. As a result, public awareness of certain bank activities may be limited.
“Individuals can benefit from the outcomes of DBSA-supported projects such as roads, schools and health clinics without necessarily knowing that banks are involved,” Nhleko said.
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