PRIVATE SECTOR FINANCING FOR INFRASTRUCTURE DEVELOPMENT IN SOUTH AFRICA

This policy brief by the Institute for Economic Justice examines the South African government's strategy to mobilize up to R1 trillion in private sector financing for infrastructure via an Infrastructure Fund over 10 years. The document critiques the 'de-risking' mechanisms used to attract private capital—such as blended finance, public-private partnerships (PPPs), and the conversion of infrastructure into asset classes—arguing that they often transfer excessive risk to the public fiscus and may fail to deliver developmental outcomes.

• The South African government aims to mobilize R1 trillion in private sector financing through an Infrastructure Fund over the next decade to address an infrastructure deficit and revive economic growth, particularly in impoverished communities.
• The government employs three primary de-risking measures to attract private investors: blended finance (using public funds for incentives like subsidies), converting infrastructure into a tradable asset class (including proposed changes to Regulation 28 of the Pension Fund Act), and public-private partnerships (PPPs).
• De-risking infrastructure investments can lead to higher costs for the state than public provision due to increased contingent liabilities, poor project planning, and cost escalations. Examples include the 2002 prison facilities in Bloemfontein and Louis Trichardt, which cost over double the expected amount (over R2 billion), and the Gautrain rail-link, which exceeded R20 billion in costs by 2009 and requires annual public payments of over R250 million.
• The brief recommends that the state maintain leadership in structural economic transformation—shifting away from fossil fuels and extractive industries—and ensures that state responsibilities for human rights and poverty reduction are not transferred to profit-driven private corporations.

APA

Phalatse, S. (2021). PRIVATE SECTOR FINANCING FOR INFRASTRUCTURE DEVELOPMENT IN SOUTH AFRICA. Institute for Economic Justice. https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-29jan2021.pdf

Chicago

Phalatse, Sonia. PRIVATE SECTOR FINANCING FOR INFRASTRUCTURE DEVELOPMENT IN SOUTH AFRICA. Institute for Economic Justice, 2021. https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-29jan2021.pdf.

Wikipedia

{{cite report |last1=Phalatse |first1=Sonia |title=PRIVATE SECTOR FINANCING FOR INFRASTRUCTURE DEVELOPMENT IN SOUTH AFRICA |publisher=Institute for Economic Justice |date=January 2021 |url=https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-29jan2021.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{phalatse2021private, author = {Phalatse, Sonia}, title = {{PRIVATE SECTOR FINANCING FOR INFRASTRUCTURE DEVELOPMENT IN SOUTH AFRICA}}, institution = {Institute for Economic Justice}, year = {2021}, month = jan, url = {https://iej.org.za/wp-content/uploads/2026/02/IEJ-policy-brief-29jan2021.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }