Treasury says infrastructure bonds to become permanent part of funding activity
National Treasury director-general Dr Duncan Pieterse says there is strong interest from institutional investors to support government’s public investment ambitions, citing recent developments in relation to government’s issuance of infrastructure bonds.
“Following the R11.8-billion raised in the debut issuance of the new infrastructure bond on 8 December 2025, we conducted our first auction tapping these instruments on the 8th of July. R5-billion was on offer, but total bids of R17.8-billion were received and we decided to allocate R4.4-billion,” Pieterse said at an Absa conference.
“Both infrastructure bonds on auction cleared close to market, which is remarkable for new and relatively illiquid instruments,” he added, indicating that the next infrastructure bond auction would take place on October 21.
“These are the first steps in creating a new asset class that will build a market in infrastructure financing over time.”
The money would support projects under government’s Budget Facility for Infrastructure (BFI), which now had four annual bid windows and had approved R104-billion of projects since inception.
Transnet had received R11.2-billion to repair the iron-ore and coal corridors as well as improve the efficiency of the Durban container terminal.
“This investment by the government has been structured to unlock R18-billion in private-sector capital to improve the productive capacity of South Africa’s port and rail system,” Pieterse said.
As the BFI windows were concluded, projects from the bid windows would be packaged to issue more infrastructure bonds, making them a permanent feature of government’s funding activities.
“These new funding instruments also give the government greater funding optionality, reducing pressure on our traditional sources of domestic funding and helping to build further fiscal buffers,” Pieterse added.
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