'I can smell money in this room': Ramaphosa unveils infrastructure projects to private investors

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Government is hoing to unlock R210 billion with the 28 infrastructure projects that have undergone preparation. Getty Images.
Government is hoing to unlock R210 billion with the 28 infrastructure projects that have undergone preparation. Getty Images.
  • President Cyril Ramaphosa has opened a roundtable discussion about boosting investment in South Africa's infrastructure.
  • The roundtable between private sector financiers, development finance institutions and government will take place over two days, and discuss 28 projects that are projected to attract R210 billion in investments.
  • Government's R100 billion Infrastructure Fund will help prepare the project in the hope of making them attractive investment opportunities for the private sector.

Some 28 out of the 276 infrastructure projects that President Cyril Ramaphosa first unveiled in June were showcased to private financiers on Tuesday, as the government tries to boost infrastructure investment and create jobs.

According to Dr Kgosientsho Ramokgopa, acting CEO of Infrastructure South Africa (ISA) - the organisation that was established in July to spearhead the country's Strategic Integrated Projects - the 28 projects are expected to attract over R210 billion in investment. 

The South African government has pledged to use part of its R100 billion Infrastructure Fund to get the projects to a state where they will be attractive to private investors.

"I can smell money in this room, but I want to get to the point of feeling it," said Ramaphosa, before telling pension funds and asset managers that specialists from the private sector have scrutinised the 28 projects and government has de-risked them by taking first losses where applicable.

In total, government has prioritised 62 of the initial 276 projects the president announce in June, and is hoping that these will unlock R1 trillion in investments. The 62 Strategic Integrated Projects were gazetted in July.

"It was evident during the Sustainable Infrastructure Development Symposium process that not all of the projects were prepared," said Ramaphosa.

As project preparation can be a costly exercise, government has brought the R100 billion Infrastructure Fund which was due to be established and operationalised in 2024 into operation already. The fund will finance the preparation of all priority projects, which the president said should ensure that they are completed "on time, on budget and on target".

"Sometimes if you go around the country, you'll find projects that have been either stopped, abandoned because there was no proper planning. There was no proper preparations. You'll see foundations sprawling a number of places, pipes just lying by the side of the road. Now, we want to avoid all that," he said.

Catalyst projects

Ramokgopa said the 28 projects showcased on Tuesday were chosen because of their multiplier effect and job elasticity.

They include projects like an aeroponics factory in the Free State, a space infrastructure hub to help SA fast-track the development of satellites, the Boegoebaai Port, Rail and Infrastructure Development Project in the Northern Cape, and the Port of Ngqura in the Eastern Cape.

"For the first time in many years in the country, there's a project that is going to resuscitate the economy of the Northern Cape, diversify it a bit  to diversify outside of mining," said Ramokgopa.

He added that these projects will also ensure that additional projects are created in future because of them.

"If we are able to be successful out of this exercise – and I'm more than confident that we will – we should be in a position to unlock R210 billion. So, already we are one-fifth into that target of R1 trillion," said Ramokgopa.

Government had already attracted R340bn of commitments from investors during the sustainable infrastructure symposium held in June. Ramokgopa said the ISA has observed "significant amount of goodwill" from financing fraternity over the past few months as t engaged them about these infrastructure projects.

Minister of Public Works, Patricia De Lille, said on Tuesday that investment should reach 23% of GDP by 2024 and 15% of that should come from the private sector, while the public sector will contribute the remaining 8%.

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