Municipal office accommodation – Moses Kotane Municipality

INCA project team: Ben Pretorius – Portfolio Manager Kenny Morare – Credit Analyst

The local municipality of Moses Kotane is located on the boundary of North West Province, north of Rustenburg. It is a relatively new municipality, established in terms of the Demarcation Act, with challenges ranging from capacity building, education and infrastructure development to the provision of basic needs to its constituencies.

INCA was involved in the initial phase of developing this municipality and was the first financial institution to provide infrastructure finance to it. Recently, the municipality took over water services(billings and collections) from the Magalies Water Board (MWB). Apart from this function, setting tariffs and developing IT systems, the municipality was faced with providing office accommodation for the staff adopted from MWB.

The new municipal offices immediately became inadequate, hence the need to expand office space. INCA’s Credit Committee approved the additional funding with phased draw downs of R14 million in financial year.

Financial snapshot
Loan value: R14 million and a further R10 million.
Term: 15 years and 20 years, respectively.
Interest rate:11,40%.
Repayment: Capital and interest semi-annually in arrears.