The South Africa National Treasury announced a major shift in strategy to deepen private-sector involvement in public infrastructure projects, signalling a new phase in economic development aimed at enhancing the country’s infrastructure landscape.
In its mid-term budget review, the Treasury revealed that the government is working on structural reforms to foster a conducive environment for private-sector participation.
“Over the medium term, the government is transforming its approach to public-sector infrastructure by creating the conditions to attract private-sector participation,” the Treasury noted.
A key feature of this new approach is creating a blended finance risk-sharing platform, building upon South Africa’s independent power-producer program.
This platform, set to include a credit guarantee vehicle expected by the end of 2025, will aim to de-risk public infrastructure projects, making them more appealing to private developers and lenders.
Initially, the credit guarantee vehicle will be applied to independent transmission projects, with the possibility of expanding to other sectors in the medium term.
While the Treasury did not specify target investment figures, Director-General Duncan Pieterse clarified the long-term commitment to private-sector engagement.
“There is no specific number, but we are institutionalising their involvement in our infrastructure agenda,” he stated.
Currently, about 70% of infrastructure investment in South Africa is undertaken by the private sector, with the government contributing the remaining 30%, according to Pieterse.
The move is part of a broader economic strategy to leverage private capital for sustained growth and infrastructure expansion.
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