South Africa: Preparation Set To Drive Infrastructure Project


President Cyril Ramaphosa has highlighted preparation – through the Infrastructure South Africa (ISA) project preparation roundtable – as the key to unlock South Africa’s post COVID-19 economic recovery.

“This roundtable is the beginning of a more dedicated and structured approach to project preparation. It paves the way for greater private sector participation in this crucial stage of the project life-cycle. The South African government is committed to financing project preparation,” he said.

The President delivered the opening address at the ISA project preparation roundtable at the Gallagher Convention Centre in Midrand on Tuesday. 

The ISA project preparation roundtable aligns with the first priority President Ramaphosa presented last month at the joint sitting of Parliament on the South African Economic Reconstruction and Recovery Plan. 

The Economic Reconstruction and Recovery Plan outlines an aggressive infrastructure programme, far reaching reforms to increase competitiveness and inclusiveness, measures to catalyse industrialisation, relief for vulnerable households and individuals, and a public investment in employment programmes.

This plan, which is underpinned by the agreements between social partners, outlines key interventions to kick-start the country’s economy.

Among other things, we are prioritising economic reforms to unlock investment and growth, fighting crime and corruption, driving industrialisation with a focus on growing small businesses, improving the capability of the state, and creating jobs through mass public employment programmes. 

Another key priority intervention for government is to promote aggressive infrastructure investment and unlock R1 trillion over the next four years in infrastructure investment through the recently operationalised Infrastructure Fund. 

In a bid to secure funding for the Reconstruction and Recovery Plan, the President emphasised project preparation as a necessary tool to unlock private sector funding and high impact capital funding.

According to the Global Infrastructure Hub, infrastructure project preparation costs in developing countries can range from 5 to 10% of the total project investment, with African governments covering most of these costs. 

This is compared to the 3 to 5% of project costs in developed countries, where project funds and facilities are willing to take the risks to fund projects. 

“Clearly, there needs to be more coordinated engagement between governments and the private sector and other players in the infrastructure financing space. 

“In addition to bolstering project preparation, we are working on introducing innovative project financing instruments such as green infrastructure bonds, project bonds and performance bonds,” said the President. 

The recent establishment of ISA is also set to go a long way towards streamlining the preparation and implementation process. 

“It is a step towards creating an enabling environment for financiers and a one-stop shop where projects can be unlocked,” said the President. 

Through ISA, government will invest in building state capacity in the areas of project technical and financial engineering skills. 

“Despite the daunting challenges we face, the post COVID-19 reconstruction and recovery phase is alive with possibility. 

“For South Africa, it is an opportunity to establish ourselves as an investment destination of choice, with a ready and able workforce,” said the President.

SA News

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