Deputy President Paul Mashatile on Tuesday told international investors that infrastructure development will play a pivotal role in driving economic growth, fostering innovation, and improving the quality of life for South Africans.
Mashatile, speaking at the Standard Bank infrastructure focus engagement with the British Development Finance Institution in London, said infrastructure investment was critical to the country’s development.
He is on a working visit to improve trade and investment relations between South Africa and the United Kingdom
“Infrastructure that is well-designed is essential for the efficient production and utilisation of products and services, as it reduces trade costs and enables economies of scale. It is a critical component of economic growth and development, which is essential for the improvement of living standards.”
He said South Africa stands at a crossroads with infrastructure development.
“As we navigate through these challenging times, it becomes increasingly essential for the Standard Bank Group to harness opportunities in infrastructure investment and steer the country towards a sustainable future.
“Infrastructure investment in South Africa presents a vast array of prospects across various sectors, including transportation, energy, water, and telecommunication,” Mashatile said.
He reflected on the country’s vast energy resources, including oil, gas, coal, and renewable energy sources, saying that with the right investment and expertise, ‘the sector has the potential to unlock growth and improve the lives of millions of our people’.
He said Government plans to prioritise the investment in infrastructure through improvements in the infrastructure pipeline, the execution of that pipeline, and the financing thereof.
Mobilising private sector resources to augment public sector capability and finances is necessary to fast-track the provision of infrastructure and improve effectiveness, Mashatile said.
“The Government has initiated various reforms to systematically crowd-in greater private sector participation to improve spending and delivery outcomes.”
He told investors that the National Treasury is attempting to raise funding for the public sector infrastructure projects.
On the country’s energy crisis, Mashatile said the transmission infrastructure is emerging as a significant bottleneck to the ability of the grid to incorporate additional renewable energy generation into the country’s energy supply.
“The investment community can play a crucial role in this space at the back of the reforms that the National Treasury is championing to crowd in the private sector in the funding framework for the grid.
“The two prominent initiatives are the introduction of an Independent Power Transmission model and establishment of a Credit Guarantee Vehicle to de-risk projects.”
He acknowledged that while important steps have been taken recently to make it easier to speed up private investment in energy generation, ‘more needs to be done to fix the transmission grid's problems’.
The Mercury