The Eastern Cape has been identified as a "hot spot of underdevelopment" by the Development Bank of Southern Africa, meaning it will be intensifying its funding activities in the province.

This emerged on Tuesday at the launch of the bank's annual report in Midrand.

According to the bank's report, the Eastern Cape has the largest disparity between household infrastructure needs and the value of disbursements to the province. During the 2004 financial year, the bank approved R849,3-million for development loans.

Executive manager of the bank's South African operations Luther Mashaba said however this could be explained by the bank's focus on advisory and capacity development functions. "The Eastern Cape will be getting additional attention," he said.

He said the bank was aiming to shore up capacity in the province, particularly at provincial and local government levels, to ensure funding could be most effectively utilised.

This focus on capacity building has taken the form of providing advisory services while also building partnerships to ensure sustainability.

This was closely allied to provincial 2020 infrastructure projects as well as the bank?s targeted infrastructure development programme, with Mashaba saying the intention was to accelerate delivery in this area.

"We have to recognise in poorly resourced provinces the impact will be much higher, and so we are preparing the ground to absorb those funds."

The Development Bank's targeted infrastructure development programme is to disburse R1-billion over the next three years, which would be expanded through co-funding projects with other funders.