Government proposes to use a R2bn portion from its sale of Vodacom shares for South Africa’s initial capital contribution to the New Development Bank.
The share sale is expected to yield total receipts of R25.4bn, of which R23bn has been provided to recapitalise Eskom.
The purpose of the New Development Bank is to mobilise resources for infrastructure and sustainable development projects in Brics (Brazil, Russia, India, China and South Africa) and other developing countries.
The bank’s headquarters are in Shanghai and the first regional office will be established in Johannesburg. Initially, Brics countries will be the only members, each with a shareholding of $10bn and equal voting power. Subscribed capital is made up of 20% paid-in capital and 80% callable capital.
In time the bank will be open to all members of the United Nations.
The adjustments include R23bn appropriated for Eskom Holdings through the Eskom Special Appropriation Act (2015) and R2bn for the payment of South Africa’s first capital contribution of $150m to the New Development Bank. These allocations are conditional on the total amount being covered by receipts from the sale of assets, including government’s shareholding in Vodacom.
The Vodacom share sale is set to increase the 2015/16 estimate of revenue by R25.4bn. An amount of R12.6bn from the sale has already been paid into the National Revenue Fund and the balance will be paid during the second half of the year.