South Africa\u2019s infrastructure development agency has restructured its pipeline of planned projects to make them more attractive to the private sector as state officials court investors in the UK.<\/p>\n\n\n\n
Deputy President Paul Mashatile is leading a ministerial delegation on a weeklong roadshow to London, where the officials are looking to capitalize on market optimism about the nation\u2019s newly formed coalition government. <\/p>\n\n\n\n
It\u2019s pitching for investment in energy, water and freight-rail projects, said acting head of Infrastructure South Africa Mameetse Masemola.<\/p>\n\n\n\n
South Africa in February amended regulations governing public-private partnerships to make it easier for businesses to invest in them, and as the National Treasury faces constraints on spending as it tries to reduce its debt burden. Total infrastructure investment envisaged by the South African government over the next three years amounts to R943 billion, according to the presidency.<\/p>\n\n\n\n
\u201cWith the new guidelines we have had to pivot and look at projects that are candidates for public private partnerships, projects that will qualify for blended finance,\u201d Masemola said in an interview in London on Monday. \u201cThis will include social infrastructure that must illustrate enough innovation that they can garner private financing.\u201d<\/p>\n\n\n\n
The ISA finances projects worth more than R1 billion that are aimed at fulfilling national development needs. These are compiled in a so-called construction book, in which investors can view the project pipeline.<\/p>\n\n\n\n
President Cyril Ramaphosa has vowed to turn South Africa into a construction site by investing in infrastructure to revive economic growth that\u2019s averaged less than 1% over the past decade. <\/p>\n\n\n\n
National Treasury guidelines ahead of a mid-term budget \u2014 to be presented on 30 October \u2014 are clear that no new money will be made available for capital projects, meaning that programs must attract private-sector investment in order to get off the ground.<\/p>\n\n\n\n
\u201cProjects have got to demonstrate that they can leverage private sector financing, so PPPs are going to be quite important,\u201d Masemola said.<\/p>\n\n\n\n
Africa\u2019s most-industrialised economy requires R1.6 trillion of public-sector infrastructure investment and a further R3.2 trillion from the private sector to meet targets set out in the government\u2019s National Development Plan by 2030.<\/p>\n\n\n\n
Red tape has previously deterred investment, with as many as 86 approvals being needed for projects that were fully funded. Those policy constraints and others that dampened private sector appetite have now been removed, according to Masemola.<\/p>\n\n\n\n
\u201cInvestors were not able to submit unsolicited bids, projects below R2 billion had to come through the Treasury and then go through those typical approvals,\u201d she said. \u201cNow they\u2019ve given some level of flexibility to accounting officers to give early approval.\u201d<\/p>\n\n\n\n
More reforms to make it easier to design bankable projects for private investors are expected when Finance Minister Enoch Godongwana tables the mid-term budget, where he\u2019s expected to announce further changes to the infrastructure-financing regime, according to the Treasury.<\/p>\n\n\n\n