Infrastructure South Africa (ISA) announced 12 priority projects the country is implementing in 2024 during the Sustainable Infrastructure Development Symposium of South Africa (SIDSSA) – held in Cape Town last week. Energy Capital & Power spoke with Mameetse Masemula, Head of ISA, about how the state agency is raising funds to support the rollout of the projects and their impact on the economy.
South Africa requires 5.7 trillion rands to bridge the infrastructure investment gap by 2050. How does ISA plan to address this deficit?
Projects which are submitted to and registered with ISA have no allocated funding from the government, so we deploy our own resources for project preparation to make them bankable. We unpack these projects according to their commercial viability, financial modeling and cost-benefit analysis. We work with the national treasury to secure physical allocations and unlock funding when the projects are financially viable and bankable. Project sponsors and owners enable us to go out to debt capital markets to attract financing for these projects. We also leverage the Infrastructure Fund to access the funding required across the entire value chain, from project preparation to financing to deployment.
How do you plan on fast-tracking the rollout of the 12 priority infrastructure projects?
Capacity to deliver projects is always a challenge, especially in municipalities, provincial governments, and other public entities. Some SOEs are very strong and have the capacity to deliver large projects. ISA does not get involved in procurement, we come in on the project implementation stage, or when we are required to do so. However, when we are required, we deploy our own resources to assist and work with the project owner to fast-track the contracting stage. We have the financial and technical capabilities to help developers and investors track the implementation of projects according to schedule and budget.
President Cyril Ramaphosa unveiled the Construction Book during SIDSSA 2024. What does this mean for ISA?
This is the first edition of a Construction Book in South Africa. Ordinarily, construction companies and supplier industries need to comply with various state-owned enterprises (SOEs). The value add is in pulling this information together into one investment guide for the construction industry, where we list all the projects that are coming to market. Having all this information in one place will help construction companies and engineering firms gain a line of sight to everything they need to know, all in one document. For us, the book simplifies partnership formations with project developers and investors. ISA will update the book throughout the year as projects become completed and new ones come up.
South Africa is prioritizing gender inclusivity and women empowerment across the economy. How is ISA creating opportunities for women?
We abide by gender inclusivity targets set under the Black Economic Empowerment (BEE)-clause, the Public Finance Management Act and the Municipal Finance Management Act. These regulations aim to empower historically disadvantaged women and people with disabilities. We conduct benefit realization at the end of the deployment of the construction asset to check that resources are allocated fairly, including whether employment opportunities were offered fairly to disadvantaged sections of society.
South Africa signed multiple MoUs with investors and partners, including the UK government, during SIDSSA. How else is ISA expanding its search for funding internationally?
The MoU with the British government is significant because it is an update of an earlier agreement signed in January 2020…The model of ISA is similar to that of the Infrastructure and Projects Authority in the UK. The idea of the Construction Book was borrowed from the UK, which shows how we are applying international best practices in infrastructure development and delivery. What is different about the new MoU is that we have added the components of business-to-business and business-to-government engagement, which will help take advantage of business opportunities in the UK by sending South African delegations to the UK and inviting UK investors to South Africa to see what our country has to offer.
