Pretoria: Efforts to step infrastructure development are accelerating in South Africa – to support economic growth and drive improved service delivery.
According to South African Government News Agency, this momentum is detailed in the National Treasury’s Medium Term Budget Policy Statement (MTBPS) released recently. Earlier this year, Finance Minister Enoch Godongwana, in his first budget speech for the Government of National Unity (GNU), announced a significant R1 trillion allocation for infrastructure investment over the medium term.
The MTBPS highlights that infrastructure investment has substantial direct and indirect effects on growth, increasing demand for inputs and workforce in the short term while expanding the economy’s production capacity in the long run. Reforms are being implemented to mobilize private-sector finance and technical expertise on a large scale, alongside initiatives to enhance government efficiency in infrastructure delivery and spending outcomes. These steps aim to address the persistent issue of underspending and ensure better value for money.
Reforms are also focused on creating a favorable environment for public-private partnerships (PPP) by improving the PPP framework, strengthening institutional arrangements, and enhancing monitoring and reporting. Amendments to Treasury Regulation 16, which deals with PPPs, were enacted in June.
In October 2025, guidelines concerning unsolicited bids and fiscal commitments were published, providing a structured pathway for private sector submissions of innovative project ideas. These guidelines also offer a framework for managing fiscal commitments and contingent liabilities in anticipation of the expanding PPP market. Updates to the PPP manual and development of sector-specific toolkits in priority sectors are expected by 2026.
Amendments to municipal PPP regulations are underway and anticipated to be completed by February 2026, with COGTA’s concurrence. During the MTBPS presentation to Parliament, the Minister elaborated on the reconfiguration of the Budget Facility for Infrastructure (BFI), which will now host four bid windows annually instead of one. Since this reconfiguration, the BFI has received 28 project submissions, and nine projects have been accepted for detailed analysis.
Additionally, R4.1 billion has been allocated for disaster relief to repair schools, pipelines, clinics, and substations damaged by floods in KwaZulu Natal, Mpumalanga, and the Eastern Cape over the past year. A new infrastructure bond is set to be launched, aiming to raise approximately R15 billion to fund these BFI projects.
The government will also contribute R2 billion to capitalize the Credit Guarantee Vehicle, initially supporting electricity transmission expansion. This initiative directly contributes to energy security and decarbonization efforts, marking a new era in PPPs by enabling private investment in high-voltage transmission lines.
The Infrastructure Finance and Implementation Support Agency is expected to become operational by March 2026, facilitating infrastructure finance functions to systematically attract private capital and promote alternative delivery mechanisms.