\n The programme will support projects ranging from electricity transmission lines and water systems to ports and freight rail, sectors widely seen as critical to improving growth in Africa\u2019s most industrialised economy.\n <\/p>\n
\n The initiative will be overseen by the Development Bank of Southern Africa (DBSA), a state-owned development finance institution that funds infrastructure across the region.\n <\/p>\n
\n \u201cIt\u2019s going to be a big injection in a very short time,\u201d Mpho Mokwele, group executive for coverage and origination at the DBSA, said, according to Bloomberg. \u201cWe now have the fiscal headspace to issue further guarantees to support our infrastructure projects and programs.\u201d\n <\/p>\n
\n South Africa has long relied on sovereign guarantees to support struggling state-owned companies, particularly in the energy and transport sectors. These guarantees create financial risks for the government because the state must step in if the companies fail to repay their debts.\n <\/p>\n
\n According to Bloomberg, those contingent liabilities currently amount to about 661 billion rand (around $40 billion).\n <\/p>\n
\n The new credit-guarantee vehicle aims to reduce that pressure by helping infrastructure projects attract private funding while limiting the government\u2019s direct exposure.\n <\/p>\n
\n The move also supports a broader infrastructure push by President Cyril Ramaphosa, whose government has budgeted 1.07 trillion rand for infrastructure investment over the next three fiscal years.\n <\/p>\n
\n According to Mokwele, the guarantee vehicle could mobilise far more investment than its initial capital. The fund is expected to raise up to four times its starting capital of $500 million, with the multiplier potentially increasing as it secures credit ratings and gains acceptance among investors.\n <\/p>\n
\n Several global development finance institutions have already shown interest in backing the fund.\n <\/p>\n
\n It has secured $350 million from the World Bank International Bank for Reconstruction and Development. Other institutions considering participation include the African Development Bank, the International Finance Corporation, Germany\u2019s development bank KfW and South Africa\u2019s Industrial Development Corporation.\n <\/p>\n
\n A local commercial bank has also signalled interest, although Mokwele declined to name it before a final agreement is reached.\n <\/p>\n
\n \u201cWhen one of them comes into the mix others do follow.It\u2019s just about signaling, sending a positive signal to the market that they\u2019re keen on participating and supporting government\u2019s efforts of unlocking infrastructure,\u201d he said of commercial lenders.\n <\/p>\n
\n South Africa\u2019s National Treasury of South Africa is also expected to invest in the fund and could take up to 20% equity, while state-owned entities such as the DBSA may increase public-sector participation to about 30%.\n <\/p>\n
\n The financing push comes as South Africa faces massive infrastructure investment needs.\n <\/p>\n
\n The country plans to expand its national electricity transmission network by 14,000 kilometres to connect renewable energy projects, many located in the western parts of the country. That project alone is expected to cost about 440 billion rand.\n <\/p>\n
\n Upgrading ports and freight rail lines, key infrastructure for exporting minerals and agricultural products, could require another 330 billion rand, Bloomberg reported.\n <\/p>\n
\n Mokwele said one of the first initiatives likely to benefit from the guarantee programme is the government\u2019s independent transmission programme, which aims to attract private investment into expanding the national electricity grid.\n <\/p>\n
\n \u201cThe first program that we are looking at unlocking is the independent transmission program,\u201d Mokwele said.\n <\/p>\n
\n But the fund will not be limited to energy infrastructure.\n <\/p>\n
\n \u201cIt\u2019s actually meant for the infrastructure projects and programs holistically,\u201d which would even include hospitals and student accommodation, he said.\n <\/p>\n
\n Water infrastructure projects managed by the Trans-Caledon Tunnel Authority, the agency responsible for some of South Africa\u2019s largest bulk water supply schemes, could also benefit.\n <\/p>\n
\n The DBSA will additionally run a public-sector participation unit aimed at attracting private investment into South Africa\u2019s logistics sector, Mokwele added.\n <\/p>\n","protected":false},"excerpt":{"rendered":"The programme will support projects ranging from electricity transmission lines and water systems to ports and freight rail,…\n","protected":false},"author":2,"featured_media":332050,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46],"class_list":["post-332049","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-il","tag-israel"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/332049","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=332049"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/332049\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/332050"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=332049"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=332049"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=332049"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}