Treasury launches SA's first infrastructure bond to boost sector investment

The National Treasury has launched a new Infrastructure and Development Finance Bond which will be issued to the market under government’s domestic borrowing programme.

This is part of a raft of reforms, first outlined in the 2024 Medium Term Budget Policy Statement (MTBPS), to boost investment in infrastructure.

This is needed to foster stronger economic growth and service delivery, also through long-term financing instruments, Treasury says in a statement.

It's part of the broader reform agenda that's aimed at driving growth through catalysing greater infrastructure investment, says Treasury Director General Duncan Pieterse.

"In last year's MTBPS we said that one of the pillars of the infrastructure reform agenda will be introducing innovative financing instruments. Work on the credit guarantee vehicle to de-risk private sector participation in transmission infrastructure development is well under way with our partners the International Finance Corporation and the World Bank. And another important feature of that reform process was issuing dedicated infrastructure bonds."

This is the first time government has issued an infrastructure bond - It aims to take advantage of investors’ appetite for the sector as an asset class to raise funding at favourable market rates.

Pieters notes that the 2026 budget next year will, for the first time show borrowing specifically for infrastructure.

Proceeds from the bond will be earmarked exclusively for financing eligible projects supported by the reconfigured Budget Facility for Infrastructure (BFI).

These include critical energy, water, transport, and social infrastructure investments that have undergone rigorous technical and financial evaluation, the statement says.

To support these projects, Treasury will issue the bond to mobilise a minimum of R15 billion, with the potential to upsize this depending on prevailing market conditions and investor demand.

Scroll up to the audio player to listen to the conversation with Treasury's Duncan Pieterse