Page 54 - 40th Summit Brochure 2020

FINANCE T e PPDF supports SADC Member
States with funds to undertake feasibility,
Financial Inclusion and Remittances technical and engineering designs, environ-
Indications are that at least 32 percent of the mental and social impact assessment stud-
adult population in the region is f nancially ies, as well as preparation of tender
excluded. T is translates to 45.7 million peo- documents and transaction advisory serv-
ple. SADC Member States plan to reduce the ices to make projects bankable for f nancing
f nancial exclusion rate to 25 percent by 2021. and implementation. Current funding for
T e status of f nancial inclusion varies con- the PPDF has been secured from the Euro-
siderably across the region, from 97 percent pean Union and KfW. T e Development
in Seychelles to 40 percent in Mozambique. Bank of Southern Africa (DBSA) is hosting
In line with the decision by the Ministers of the PPDF on behalf of the SADC Secre-
Finance and Investment at their July 2019 tariat.
meeting held in Namibia, the operationalisa- As of December 2019, the PPDF had
tion of the SADC Financial Inclusion Sub- disbursed US$22.2 million to support proj-
committee is ongoing. T e objective of the ect preparation for 13 regional infrastruc-
committee is to coordinate the work on f nan- ture projects in the energy, transport and
cial inclusion and build synergies among the water sectors. T ese projects require a com-
structures dealing with f nancial inclusion bined US$5.85 billion in investment to en-
across the region. sure completion. Furthermore, the projects
Cross-border remittances are recog- present business opportunities across the
nised as major sources of foreign currency infrastructure value chain in areas such as
inf ows for a number of SADC Member advisory services, f nancing, construction,
States. In addition, remittances have been a equipment supply, technology, skills, oper-
key enabler of f nancial inclusion and ations and maintenance. T e 13 regional
poverty alleviation. T e main objective in projects that have received project prepara-
the region is to reduce the average cost of tion support from the SADC PPDF are:
remittances, while promoting the use of for- ❖ Mozambique – Zimbabwe – South
mal channels. For instance, the costs of Africa (MOZISA) interconnectivity 51
cross-border remittances have been reduced project;
by 3.6 percentage points from an average of ❖ Second Alaska – Sherwood 400 kV line;
13 percent per transaction to about 9.4 per- ❖ Kasomeno – Mwenda Toll Road (DRC,
cent. T is is with particular reference to re- Zambia);
mittances involving South Africa, ❖ Rehabilitation and upgrade of the
Botswana, Eswatini, Lesotho, Malawi, North South Rail Corridor (South
Mozambique, Tanzania, Zambia and Zim- Africa, Zimbabwe, Zambia, DRC and
babwe. T e challenge is to further reduce Botswana);
these costs to meet the UN SDG target of ❖ Luapula Hydro Power Development
three percent by 2030. It is estimated that (Zambia);
SADC migrants resident in South Africa ❖ Angola – Namibia Transmission Inter-
remit approximately R21.9 billion to their connector;
respective home countries annually. How- ❖ Mulembo Lelya Hydro Electric Power
ever, about 52 percent of this amount, val- (DRC and Zambia);
ued at R11.3 billion is remitted through ❖ Africa Green Co (all Member States);
informal channels. ❖ Development of Guidelines and Stan-
dards for Renewable En-
ergy Projects
Development Finance
T e SADC Project Preparation Develop- and a
ment Facility (SADC PPDF) continues to
support Member States to strengthen re-
gional infrastructure connectivity through
the provision of grants for project prepa-
ration and development. T is is in
recognition of the pivotal role that
infrastructure plays in regional in-
tegration, industrialisation and
trade facilitation, as a robust infra-
structure helps to improve the
quality of life for SADC citizens.