South Africa Signals Green Light for Private Sector in Infrastructure Drive

South Africa’s government is signalling a bold shift in its infrastructure development strategy, as it opens the door to greater collaboration with the private sector to bridge financing and delivery gaps. Finance Deputy Minister Ashor Sarupen has reaffirmed the state’s commitment to reform and private sector engagement, emphasising that public-private partnerships (PPPs) will be critical to achieving sustainable infrastructure growth in the coming years.

Sarupen was speaking on the sidelines of the 2025 Sustainable Infrastructure Development Symposium South Africa (SIDSSA) in Cape Town, during a G20-themed panel discussion that explored avenues to attract global and domestic capital into South Africa’s infrastructure pipeline.

“We know the state balance sheet is limited. It simply cannot provide everything we need. At the same time, the state’s reliance on borrowing domestically is crowding out private capital that should be flowing into infrastructure investments,” said Sarupen.

He added that “unlocking private sector participation is therefore not just important — it’s urgent. We are embracing reform and committed to ensuring that we minimise the risk of failure through proper structuring and governance. Our message is simple: South Africa is open for business.”

R1 Trillion Commitment and New PPP Regulations

This renewed focus on private sector collaboration follows the announcement by Finance Minister Enoch Godongwana during the 2025 national budget presentation that government would invest R1 trillion over the medium term in infrastructure projects. In addition to this financial commitment, new PPP regulations gazetted earlier this year are set to come into force by June 2025.

According to Godongwana, the new regulatory framework is aimed at streamlining PPP procedures, thereby reducing complexity, accelerating project approvals, and enabling government to leverage limited resources more effectively.

“These [regulations] will reduce the procedural complexity of undertaking PPPs, increasing the deal flow and allowing government to leverage its limited resources to fast-track infrastructure provision,” Godongwana explained.

Enhancing Transparency and Governance

A cornerstone of the reforms is the introduction of an “unsolicited proposals framework” which will provide structured guidelines for managing proposals initiated by the private sector. In the past, unsolicited bids faced long delays or rejections due to a lack of clear regulatory pathways.

Additionally, the new framework for fiscal commitments and contingent liabilities is expected to enhance governance and mitigate financial risks associated with large-scale infrastructure deals.

“These guidelines and frameworks will be published in the coming weeks and are designed to support a more coherent and responsive PPP ecosystem,” the Minister said.

Decentralised PPP Units and Departmental Empowerment

In another significant development, Public Works and Infrastructure Deputy Minister Sihle Zikalala revealed during a press briefing that government departments — especially those deemed strategic — will now be empowered to establish their own PPP implementation units. Historically, these units operated solely within the National Treasury.

“This is a game-changer,” Zikalala said. “We are decentralising the capacity to manage PPPs so that departments can develop their own instruments to fast-track implementation. We also intend to allow unsolicited bids in cases where competition in the market is limited. This will create more flexibility and ensure timely funding for vital infrastructure projects.”

Driving Inclusive Economic Growth

The South African government views infrastructure as a critical enabler of inclusive economic growth, job creation, and regional integration. With the global infrastructure financing gap continuing to widen, countries like South Africa are being urged to innovate financing models and attract private capital.

SIDSSA 2025 has drawn infrastructure investors, developers, and financiers from around the world. Delegates have been particularly interested in South Africa’s plans to roll out transport corridors, energy generation projects, water supply systems, and housing developments — all with strong PPP components.

The reforms and commitments announced are widely seen as a turning point in the country’s infrastructure trajectory. By creating an enabling environment for private sector participation and by ensuring stronger risk governance, South Africa aims to unlock a robust pipeline of projects capable of driving growth and development well into the future.