Cape town: In a strategic move to boost infrastructure development and foster economic growth, the government is actively engaging with the private sector to enhance infrastructure delivery and optimize spending. Minister of Finance Enoch Godongwana emphasized the government’s commitment to leveraging public resources to attract private finance and expertise, with the aim of improving service delivery and driving economic growth.
According to South African Government News Agency, Minister Godongwana, while presenting the Medium-Term Budget Policy Statement (MTBPS) at the National Assembly, highlighted that capital payments are set to become the fastest growing expenditure category, with a projected growth rate of 7.5% over the medium term. This shift underscores the government’s focus on transitioning spending from consumption to investment, thereby contributing to economic growth and infrastructure enhancement.
The government has implemented amendments to Public Private Partnerships (PPPs) effective from June 2025, designed to unlock potential across various government spheres and expedite approvals for smaller projects. New guidelines on unsolicited bids and fiscal commitments have been introduced to provide a structured pathway for private sector engagement and to manage fiscal commitments arising from PPP projects.
Further reforms are anticipated, with municipal PPP regulations set for amendment by 2026. Drawing from lessons learned in the Renewable Energy Independent Power Producers project, the Department of Transport’s private-sector participation unit is revitalizing the passenger transport and logistics sector. The unit plans to issue a request for proposals for the first rail corridor by December 2025, with subsequent proposals in early 2026.
The Water Partnerships Office is making strides in preparing non-revenue water and reuse projects, aimed at creating investment opportunities for the private sector. The government has also revamped the Budget Facility for Infrastructure (BFI) to conduct four bid windows annually, resulting in 28 submissions and nine projects selected for detailed analysis.
To support disaster relief efforts, R4.1 billion has been allocated for repairing infrastructure damaged by floods in KwaZulu-Natal, Mpumalanga, and the Eastern Cape. Additionally, a new infrastructure bond is set to be launched to raise a minimum of R15 billion, facilitating the financing of BFI projects.
The Credit Guarantee Vehicle will receive a R2 billion capital injection, initially supporting electricity transmission expansion, contributing to energy security and decarbonization efforts. This initiative marks a significant advancement in enabling private investment in high-voltage transmission lines and diversifying power sources.
In collaboration with international partners, the government is simplifying institutional arrangements to de-risk private investment. The upcoming Infrastructure Finance and Implementation Support Agency, operational by March 2026, will centralize infrastructure finance functions and promote alternative delivery mechanisms.
To address capacity constraints in municipalities, the government is piloting a utility reform program in Mpumalanga, utilizing accredited indirect delivery partners to enhance infrastructure provision and municipal capability.
Minister Godongwana reaffirmed the government’s commitment to exceeding R1 trillion in public sector infrastructure investment over the next three years, underscoring the importance of these reforms in achieving sustainable growth and development.