The City of Cape Town has secured a further R2,8bn in financing towards its plans for a South African record infrastructure investment over three years. Mayor Geordin Hill-Lewis conducted the signing ceremony with the International Finance Corporation (IFC) today, 23 August, following Council green-lighting the finance in June.
Cape Town plans to spend R39,5bn on infrastructure from July 2024 – June 2027, as approved in its ‘Building For Jobs’ Budget. This is South Africa’s largest ever three-year infrastructure investment by a metropolitan municipality.
‘We are pleased to secure further finance towards our ambitious infrastructure investment agenda, which we estimate will create 130 000 construction-related jobs alone over three years. Lower-income households will also directly benefit from 75% – or R9bn – of Cape Town’s R12bn infrastructure spend in 2024/25.
‘This pro-poor infrastructure spend in 2024/25 is bigger than the entire infrastructure budget of any other metro. Cape Town will soon be SA’s most populous city, and we are preparing for this by investing heavily in our fastest-growing, and poorest areas. This includes upgrades to critical water and sanitation, transport, and electricity infrastructure,’ said Mayor Hill-Lewis.
With a tenor of 18 years, the IFC’s loan will help the City to invest sustainably in assets with long operational lifespans. The City’s 10-year pipeline is valued at an estimated R120bn, with the majority of projects also linked to the City’s overall Climate Change Strategy.
‘We are delighted to announce our collaboration with the City of Cape Town in enhancing the standards of water and sanitation services, wastewater treatment, roads infrastructure, and power supply to boos’ the City’s resilience,’ said Cláudia Conceição, Regional Director for Southern Africa at IFC.
‘In general, through the enhancement of infrastructure quality and related services, our partnership aims to establish a more favourable environment for residents and businesses in Cape Town.’
In October 2023, the City published a request for funding proposals (RFP) regarding financial years 2023/24 and 2024/25, which was followed by extensive engagements with local and international lenders.
Alongside the IFC finance approval in June 2024, City Council further approved R3,5bn in finance from Nedbank, and in April 2023, greenlit €100 million developmental financing from the Agence Francaise de Developpement (AFD).
The City is following a blended finance model, which includes funding from its own healthy balance sheet, as well as finance from the local and international markets.
Further financing agreements are set to serve before Council during the 2024/25 financial year regarding the balance of the funding requirements for the City’s infrastructure plans.
