By Thebe Mabanga
The National Treasury has successfully raised nearly R11.8-billion through South Africa’s inaugural Infrastructure and Development Finance Bond
The auction for the bond was more than twice oversubscribed at R 26 billion, indicating a strong appetite for South African bonds but also infrastructure financing.
The funding will be accessible to all spheres of government, including municipalities, as well as by State Owned Enterprises (SOEs).
“This issuance forms part of a suite of reforms, first outlined in the 2024 Medium Term Budget Policy Statement, to boost investment in the infrastructure required to drive higher economic growth and improve service delivery,” Treasury said in a statement.
The bond will support projects under the Budget Facility for Infrastructure (BFI) — a mechanism within the budget process that screens and supports nationally prioritised public infrastructure projects.
Established in 2016 and updated in the 2024 MTBPS, the BFI now has four bid windows a year, enabling national and provincial departments, municipalities and SOEs to apply for funding for the early-stage, high-risk phases of infrastructure projects to help attract private investment.
“The proceeds from the Infrastructure and Development Finance Bond will be used exclusively to finance projects under the BFI programme,” Treasury said.
“As part of the funding strategy, the National Treasury plans to tap these bonds in future auctions to finance further BFI-aligned infrastructure projects. These reforms include the development of long-term financing, with g instruments to crowd in investment for priority public infrastructure.”
The bonds were split into 10- and 15-year maturities, with the RI 2036 raising R6.99 billion at 8.575% and the RI 2041 raising R4.79 billion at 9.13%, issued shortly after South Africa received its first credit upgrade in 16 years from S&P, while Moody’s maintained its rating.
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