DBSA's Moody’s ratings upgrade boosts infrastructure development efforts

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 to Ba2 from Ba3.

The bank said this reflects its improved funding and liquidity profile, sustainably strong capital buffers, and its ability to maintain low levels of non-performing loans—around 3.8% of gross loans—despite high asset risks and a fragile operating environment.

The bank’s standalone assessment has also been upgraded to ba3 from b1, and the long-term national scale issuer rating to Aa2.za from Aa3.za.

DBSA Chief Economist and Group Executive for Strategy and Sustainability, Zeph Nhleko, said the confirmed stable outlook acknowledges the strong capital buffers that cushion assets from risks and pressures in the current low economic growth environment. He added that this is in line with the stable outlook on the sovereign rating, given that the DBSA is 100% government-owned.

“As such, the bank could be upgraded further if the operating environment improves, the sovereign rating is upgraded, and the bank’s funding profile or credit concentration improves,” Nhleko said.

Nhleko said the rating upgrade also confirms the DBSA’s high performance in infrastructure development on the continent, driven by transformative infrastructure projects across network sectors to address investment, growth, and unemployment challenges.

“For over 42 years, the DBSA has championed African infrastructure and capacity building, collaborating with continental and global partners to fulfil its mandate. Driving economic transformation and access is a critical part of the DBSA’s mandate,” Nhleko said.

As of the end of September 2025, the bank had supported infrastructure development worth about R43 billion. This includes R11.1 billion in loans and equities, R2.9 billion in funds catalysed, R2.3 billion in infrastructure unlocked for municipalities, R24.5 billion in key projects enabled, and R2.4 billion in infrastructure delivered.

Nhleko said some of the mega projects in which the DBSA is engaged—often as part of public investment—include the reconstruction of Parliament in Cape Town valued at R4.6 billion; the construction of the Siloam and Limpopo Academic mega hospitals in Limpopo for a combined R6.8 billion; the Rooiwal Waste Water Treatment Works in Hammanskraal valued at R633 million; and monitoring the Northern Cape Accelerated Housing Delivery Programme in Kimberley and Upington valued at R1 billion.

“This level of infrastructure support has not only contributed to national capital formation aggregates but has also enabled the bank to facilitate more than 12,000 jobs, support black-owned entities, and allocate 40% of total procurement spending to B-BBEE entities, while maintaining proper governance and risk management frameworks,” Nhleko said.

He added that the DBSA also finances and develops various growth-inducing mega infrastructure projects. These are large-scale, complex initiatives designed to drive long-term economic development and transform the economies and societies in which they are located.

“These types of projects, generally falling under the water and sanitation, transport, energy, information and communications technology, education, health, and social housing sectors, are at the centre of creating jobs, modernising infrastructure, and improving access. There are an estimated 12.4 million people in South Africa who are capable and willing to work but cannot find jobs. This represents the primary challenge currently facing our nation, and resolving it requires greater investment,” Nhleko said.

He said the DBSA’s institutional strength is anchored in its robust governance framework and rigorous control mechanisms.

“While our people remain our most valued asset, the DBSA is equally defined by its uncompromising commitment to rigorous governance. As a leading African development finance institution (DFI), we maintain a robust framework aligned with international best practices to ensure transparency and accountability,” Nhleko said.

He emphasised that the DBSA’s work involves technical and financial partnerships that often take place behind the scenes, as the bank acts as a financier, advisor, and implementer. As a result, public awareness of the bank’s specific activities may sometimes be limited.

“Individuals may benefit from the outcomes of DBSA-supported projects—such as roads, schools, and clinics—without necessarily knowing that the bank was involved,” Nhleko said.

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