South Africa’s efforts to accelerate infrastructure investment, create jobs, and drive economic growth have received a major boost with the World Bank Board of Executive Directors’ approval of the South Africa Blended Finance Platform for Resilient Infrastructure Program.
The program establishes a new Credit Guarantee Vehicle (CGV) to help mobilize private capital for resilient infrastructure, with the World Bank—alongside national and international development partners—supporting South Africa’s reform agenda.
South Africa’s growth has averaged less than one percent over the past decade, while unemployment remains above 30%, with young people being disproportionately affected. Persistent bottlenecks in electricity, freight logistics, and water services continue to raise costs, constrain productivity and job creation as well and limit opportunities for firms and households.
The CGV will issue market-based credit guarantees that will help de-risk investment in infrastructure, crowd in private capital, and reduce reliance on sovereign guarantees. This will strengthen fiscal sustainability while expanding infrastructure delivery. Over a ten-year period the program is expected to mobilize about $10 billion of capital (approximately R160 billion ZAR), including capital from private investors, commercial lenders and institutional investors, generate about 997,000 direct and indirect jobs, and contribute to the reduction of greenhouse gas emissions.
“Investment in infrastructure is central to South Africa’s efforts to restore growth and create jobs. This operation supports the government’s agenda by helping mobilize private investment for infrastructure that improves services, strengthens competitiveness, and expands economic opportunity.”
– Satu Kahkonen, World Bank Division Director, South Africa
South Africa has deep and sophisticated financial markets, yet long-term institutional capital remains under-allocated to infrastructure. At the same time, infrastructure needs are substantial and cannot be financed by the public sector alone. The CGV introduces a blended finance structure designed to crowd in investors to share risk more efficiently and attract long-term private capital at scale.
The program, which will be implemented by the National Treasury, includes $350 million in financing from the International Bank for Reconstruction and Development (IBRD), to capitalize the CGV through the Government of South Africa and support project pipeline development and implementation capacity.
“I am pleased to announce that National Treasury together with the World Bank are making significant progress with the Credit Guarantee Vehicle. The CGV, which will support massive investments in transmission infrastructure, will be incorporated as a company in the coming months. Next, we expect development partners to confirm their capital participation. We are targeting the CGV to be operational later this year.”
– Enoch Godongwana, Minister of Finance, South Africa
The CGV complements reforms under Operation Vulindlela II – the government’s structural reform program to unlock growth and investment – and broader efforts to improve governance, regulatory certainty, and project preparation capacity in the electricity, transport, and water sectors. It is also aligned with South Africa’s just energy transition by supporting investment in renewable energy, transmission, storage, and related infrastructure.
