SADC member states are finalizing preparations for establishment of a special development financing fund designed to start with a 1.2 billion US dollars stock.
The fund will be supervised by Development Finance Institutions (DFIs) in the region which are currently 37 under the umbrella of SADC Development Finance Resource Centre (SADC- DFRC).
Chief Executive Officer Stuart Kufeni told reporters in Dar es Salaam yesterday that the seed money for the SADC Development Fund would come from member states and later the Fund will scout for more sources in and outside the bloc.
“There are several ways of raising fund but first our DFIs need rating in order to access regional and international funds (thus) addressing the finance gap in the region.
“Currently 27 DFIs have started rating procedure under SADC- DFRC guideline which are similar to international rating agencies. Soon they will graduate and attain rating status,” said Mr Kufeni.
The CEO was speaking ahead of a two-day bi-annual meetings of the SADC DFIs network to be held in Dar es Salaam starting tomorrow. The meeting is co-hosted by TIB Develop ment Bank, National Development Corporation (NDC) and Tanzania Agriculture Development Bank (TADB).
“The structure for the SADC Fund is taking shape…the challenge is for DFIs to come up with regional guarantee fund to primarily address political risks,” Mr Kufeni said.
SADC- DFRC is a subsidiary institution of SADC and is owned by SADCDFI Network which has 37 national DFIs as members from 14 countries under SADC. The institution is mandated to undertake capacity building, policy research and advocacy in the development space.
Out of 37 DFIs members in SADC- DFRC one each from South Africa, Industrial Development Corporation (IDC) and Botswana Development Corporation (BDC) are full rated.