South Africa must lead to attract investments from the New Development Bank

As impact investing becomes increasingly important for capital allocators globally, it is time South Africa steps out of the shadows to attract foreign investments.

South Africa was one of the five bank founders along with Brazil, Russia, India and China in 2015 to mobilise resources for infrastructure and sustainable development projects in the BRICS and other emerging market economies and developing countries (EMDCs). South Africa should use the Annual Meeting of the New Development Bank (NDB) to position itself as an investment destination with bankable infrastructure and sustainable projects.

Sustainability is at the core of the Bank which seeks to ensure that all projects that it finances are implemented in a sustainable way and their ESG (environmental, social and governance) impacts are assessed, minimised and mitigated during project implementation.

In my over three decades as a corporate financier and international banker, I believe South Africa lags in attracting investments from the New Development Bank. There are several reasons for this: the country is not entirely familiar with the inner workings of the Bank - especially leveraging funding and different funding models.

Our projects are not prioritised by a central national authority to be presented to the Bank. South Africa’s data is not coherent enough as demonstrated by the recent Stats SA census debacle highlighted in the press. As a result, viable projects are not adequately presented for funding. In some instances, many worthy projects miss out on funding opportunities from the Bank as there is little knowledge about the Bank.

These challenges should make the government and business leaders seek ways to leverage South Africa’s membership of the NDB. This important conference seems to be a low-key event in the SA media and among decision makers.

As a country, we need to take this opportunity to showcase South Africa as a worthy beneficiary for NDB funding. South Africa needs to learn to work with the bank and showcase its projects. Importantly, the country needs to get the local financial institutions with know-how of global financial models to partner in these undertakings as the NDB mostly co-funds alongside local financiers.

Alley Roads is a clear leader in the South African affordable housing sector having doubled its rental portfolio in the past four years to over 7 500 affordable apartments and student accommodation.

Founded in 2009, they are an award-winning, leading black-owned, national-scale property developer and landlord focused on three core areas:

• Affordable housing

• Student accommodation

• Retail property

Their vision is to remain a long-term holder of property for rental stock and unlock sustainable value from its assets under management through strategic developments and acquisitions. This vision is premised on prudent capital allocation, the ability to identify value-enhancing opportunities, a strong execution team, a firm approach to strategic partnerships, and long-standing industry relationships.

Secondary to the development and acquisition of the property assets, Alley Roads GreenTech is focused on providing all sites within the Group with award-winning green solutions and ensuring value to end-users.

As Chairman of South Africa’s leading affordable housing developer, I hope to interact with the NDB and other invitee development agencies, to learn how to attract the necessary capital to assist the growth of our Group to provide more houses in the affordable sector. Infrastructure investments are critical to economic growth and alleviating poverty in South Africa. Massive social impact investment projects undertaken by Alley Roads and others could tap into the NDB funding to accelerate the delivery of these projects.

Alley Roads strives to address one of the most fundamental human rights – to provide decent shelter at affordable prices, along with providing communities with renewable energy, facilities and environmentally sound access to water.

The New Development Bank is a prospective catalyst for this country and Alley Roads. Understanding how to leverage on South Africa’s membership will be key in addressing the country’s challenges while investing for economic and social good.