Over the next three years, total planned infrastructure expenditure will amount to R1.07 trillion, of which 54.1%, or R577.4 billion, will be executed by state-owned companies and public entities, with funding pooled from the national budget, own revenue and private investors.
Image: David Ritchie/Independent Newspapers (Archives)
The National Treasury has announced that R1.07 trillion is expected to be spent over the next three years, actualising the country’s big infrastructure goals.
Delivering his 2026 State of the Nation Address (SONA), President Cyril Ramaphosa had characterised the allocation – the largest in the country's history – as more than just brick and mortar.
Calling it a “transformative” investment aimed at reversing years of declining fixed investment and stagnant growth.
“Through the Infrastructure Fund and new regulations for public-private partnerships, we are using innovative funding models, reducing risk and attracting investors to fast-track projects in energy, water, transport and digital infrastructure,” he said.
Director-General of the National Treasury, Dr Duncan Pieterse, said that the government is increasing funding for strategic capital projects and is reforming institutional arrangements to accelerate delivery of infrastructure projects.
“Over the next three years, total planned infrastructure expenditure will amount to R1.07 trillion, of which 54.1%, or R577.4 billion, will be executed by state-owned companies and public entities, with funding pooled from the national budget, own revenue and private investors.
“Boosting infrastructure investment will spur longer-term economic growth by removing constraints in areas such as transport, energy and water, and in the short term by raising demand for workers and inputs,” Pieterse said.
National Treasury Director-General Dr Duncan Pieterse.
Image: Supplied
Pieterse said that in 2025, the government also issued its first sovereign infrastructure and development finance bond, raising R11.8 billion at favourable rates that reflect strong market interest in financing public investment projects.
“These funds will be ring-fenced for strategic capital projects, based on a rigorous assessment process by the Budget Facility for Infrastructure.
“During 2025/26, the facility approved five projects with a total value of R49.5 billion, of which it will fund R21.9 billion.
“Other infrastructure delivery reforms are proceeding steadily. The National Treasury and the Development Bank of Southern Africa are laying the groundwork for the Infrastructure Finance and Implementation Support Agency.
“Public-private partnership regulations for national and provincial governments have been revised, and amendments to the municipal regulations will be concluded in June 2026,” Pieterse said.
“A performance-based conditional grant was introduced in 2025 to reform metropolitan trading entities responsible for services such as electricity, water, sanitation and waste management, and to ensure they re-invest revenues from services into infrastructure. This has been allocated R27.7 billion over the medium term.”
Director-General of the National Treasury, Dr Duncan Pieterse, said that government is increasing funding for strategic capital projects and is reforming institutional arrangements to accelerate delivery of infrastructure projects.
Image: Screenshot
National Treasury said that the country’s infrastructure deficit limits productivity and raises the cost of doing business, particularly through transport bottlenecks, water insecurity and uneven municipal service delivery.
They said that accelerating investment, while improving project execution and maintenance, is critical to crowd in private capital and expand productive capacity.
Investment will be supported by a pipeline of projects across energy (20%), water (17.4%) and transport infrastructure (39.2%).
Meanwhile, the National Water Resources Infrastructure Agency is expected to begin operations in 2026, supporting increased maintenance and investment in water infrastructure.
In 2025, the Cabinet approved the National Water Amendment Bill. A National Water Crisis Committee has been established, centralising the coordination of implementation of water sector reforms and restoring service reliability.
During SONA, the president said government is building new dams and upgrading existing infrastructure to ensure water security in the long term.
“We have committed more than R156 billion in public funding for water and sanitation infrastructure over the next three years.
“The construction of the Lesotho Highlands Water Project and other large-scale projects such as the Ntabelanga Dam, part of the Mzimvubu Water Project in the Eastern Cape, is advancing, and we are in the final stages of establishing a National Water Resource Infrastructure Agency to effectively manage and mobilise funding for the country’s water infrastructure,” President Ramaphosa said.
theolin.tembo@inl.co.za