South Africa is establishing a new infrastructure support agency as the nation seeks to address its crumbling infrastructure with assistance from the private sector.\u00a0<\/p>\n\n\n\n
Infrastructure investment is seen as one of the best ways to increase GDP growth, but South Africa\u2019s investment has been limited. <\/p>\n\n\n\n
President Cyril Ramaphosa previously said that he wanted the nation to become a construction zone to help with growth. <\/p>\n\n\n\n
In line with growth-enhancing infrastructure, Finance Minister Enoch Godongwaan said that the government is shifting its spending from consumption to investment.<\/p>\n\n\n\n
Speaking at the Medium-Term Budget Policy Statement, Godongwana said that capital payments are the fastest-growing expenditure item at 7.5% over the medium term. <\/p>\n\n\n\n
\u201cWe are leveraging public resources to mobilise private finance and expertise at scale to strengthen service delivery, improve spending effectiveness and drive higher economic growth\u201d <\/p>\n\n\n\n
One way of achieving this is the new Infrastructure Finance and Implementation Support Agency<\/strong>, which will be operational by March 2026.\u00a0<\/p>\n\n\n\n The agency will provide project preparation support to supply the Budget Facility for the Infrastructure (BFI) pipeline. <\/p>\n\n\n\n The BFI is a budget reform initiative established to support priority infrastructure projects via a more rigorous project planning, appraisal, and selection process. <\/p>\n\n\n\n The aim is to support enhanced project outcomes and improve value for money for the government. Projects require sustainable financial arrangements and sufficient operational capacity.\u00a0<\/p>\n\n\n\n Godongwana said the new agency will centralise finance functions to systematically crowd-in private capital and promote the use of alternative delivery mechanisms.\u00a0<\/p>\n\n\n\n The BFI is also no longer running just one bid window per year, with four bid windows taking place each year. <\/p>\n\n\n\n \u201cSince the reconfiguration, the BFI has received 28 submissions, of which 9 projects were accepted for detailed analysis. <\/p>\n\n\n\n Funding worth R4.1 billion has been allocated for disaster relief to fix schools, pipelines, clinics and substations damaged by flooding in KZN, Mpumalanga, and the Eastern Cape.<\/p>\n\n\n\n \u201cTo raise the funding for these BFI projects, a new infrastructure bond will be launched soon to raise a minimum of R15 billion,\u201d said Godongwana. <\/p>\n\n\n\n \u201cThe bond forms part of our efforts to introduce dedicated financing instruments that can mobilise cheaper financing to support our infrastructure agenda.\u201d <\/p>\n\n\n\n The government will also contribute R2 billion to capitalise the Credit Guarantee Vehicle. The vehicle will support electricity transmission expansion\/ <\/p>\n\n\n\n \u201cThis heralds a new era in PPPs, where private investment in high-voltage transmission lines is enabled.\u201d<\/p>\n\n\n\n \u201cThis is real progress in our move away from merely fixing the power utility to securing power to the grid from a range of sources.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Finance Minister Enoch Godongwana has highlighted the state’s plan to increase infrastructure spending. <\/p>\n","protected":false},"author":95,"featured_media":768138,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[20799,3796],"class_list":["post-842961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-godongwana","tag-national-treasury"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=842961"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842961\/revisions"}],"predecessor-version":[{"id":842965,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842961\/revisions\/842965"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/768138"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=842961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=842961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=842961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}