PRIVATE SECTOR FINANCING FOR INFRASTRUCTURE DEVELOPMENT IN SOUTH AFRICA

The South African government aims to mobilise R1 trillion from the private sector over 10 years via an Infrastructure Fund to address an infrastructure deficit and revive economic growth. The document argues that the current focus on 'de-risking' private investment—through blended finance, public-private partnerships (PPPs), and converting infrastructure into asset classes—often shifts excessive risk to the public fiscus and may fail to deliver developmental outcomes. It cites the Gautrain and prison facilities in Bloemfontein and Louis Trichardt as examples of costly public-sector liabilities. The author recommends that the state maintain leadership in structural economic transformation, specifically shifting away from fossil fuels and extractive industries, while implementing stricter governance, transparency, and human rights due diligence for all private-sector involvements.

• The South African government intends to use an Infrastructure Fund to mobilise up to R1 trillion in private sector financing over the next decade, utilizing de-risking mechanisms to attract investment amid fiscal austerity and high debt levels.
• Three primary de-risking measures are identified: blended finance (using public funds for subsidies and guarantees), converting infrastructure into a tradable asset class (including proposed amendments to Regulation 28 of the Pension Fund Act), and increasing the use of public-private partnerships (PPPs).
• De-risking private investment can lead to higher costs for the state than public provision due to increased contingent liabilities and poor planning. Examples include the 2002 PPPs for prisons in Bloemfontein and Louis Trichardt, where costs exceeded R2 billion, and the Gautrain rail-link, which cost over R20 billion by 2009 and requires annual public payments of over R250 million.

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} }