The R600m that Infrastructure SA has received from the fiscus over the next three years will assist the organisation to package projects for potential investors, public works & infrastructure minister Sihle Zikalala says.
This is the government’s key infrastructure project initiator which is meant to close the infrastructure-investment gap, that is the infrastructure that the country requires and the resources available to the fiscus to fund it.
In terms of the national infrastructure plan almost R5.7-trillion is required to close the gap by 2050.
Zikalala said at a media briefing the main problem so far had been the lack of adequate project preparation. The briefing was held ahead of the opening on Tuesday of the Sustainable Infrastructure Development Symposium SA, which brings together key stakeholders, experts and decisionmakers to explore partnerships between the public and private sectors and provide information about investment opportunities in infrastructure.
The conference will be addressed on Tuesday by President Cyril Ramaphosa who Zikalala said would unveil the construction book and the opportunities for investment, especially through public private partnerships.
Zikalala said the investment in large-scale infrastructure projects such as energy, road and rail upgrade, and water management was the government’s contribution to job creation and economic growth.
Since the last symposium in 2020 113 major infrastructure projects valued at R2.4-trillion were being or had been implemented. A total of R570bn was in transport and logistics.
Mameetse Masemola, head of Infrastructure SA, which was established in September 2020, said the organisation was working on packaging projects that were bankable and viable so it could seek funding from the National Treasury, development finance institutions, multilateral development banks or pension funds among others.
Infrastructure SA was working with government departments and municipalities in a bid to ease the red tape, such as multiple authorisations, permits, licences and exemptions required from the government.
Infrastructure SA has focused on energy, transport, digital communications, water and sanitation, and human settlements. The value of these projects had grown from R340bn in 2020 to R540bn, the bulk of which were energy projects.
Masemola said the number of Infrastructure SA projects under preparation over the past four months totalled 31. These were historical projects that had failed to get funding from the National Treasury.
She said Infrastructure SA was engaging with offshore funders and development banks to inform them of projects in the pipeline so they had sight of future plans. As long as projects were bankable there was a willingness and commitment on the part of multilateral institutions and pension funds to invest in them. However, the capacity to implement the projects was crucial.
Masemola noted the number of bankable and viable projects was small relative to Infrastructure SA’s total pipeline.
The briefing was also addressed by Mohale Rakgate, head of the three-year old Infrastructure Fund, which has a portfolio of blended finance projects and programmes. The fund is managed by Infrastructure SA and operationalised by the Development Bank of SA through a “ring-fenced” division of the bank.
Rakgate said the fund mobilised funds from the Treasury and on this basis brought in private sector funding. To date, the fund had mobilised R25bn from the fiscus and would seek R70bn from investors to fully fund its projects, which were concentrated in the areas of water, human settlements, logistics and transport.
Rakgate said many projects would be coming through this year.
Siza Sibanda, head of the department of public works & infrastructure’s property management and trading entity said it wanted to leverage state assets and bring in the private sector to unlock their value.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.