National Treasury has successfully raised R11.8 billion in South Africa’s inaugural Infrastructure and Development Finance Bond, marking a significant milestone in the country’s efforts to expand long-term financing for public infrastructure.

The auction drew substantial investor interest, with total bids surpassing R26 billion, resulting in an oversubscription rate of 2.2 times. Treasury officials said the strong demand signals market confidence in the government’s new financing strategy and its broader economic reform agenda.

The bond issuance was split across two maturities:

Proceeds from the bond will be directed exclusively toward projects approved under the Budget Facility for Infrastructure (BFI)—a key mechanism designed to improve the quality, scale, and financing of South Africa’s public infrastructure portfolio.

The initiative forms part of reforms outlined in the 2024 Medium Term Budget Policy Statement, which identified infrastructure investment as central to stimulating economic growth and improving service delivery. The introduction of the bond is intended to crowd in additional private sector capital while providing the government with more efficient long-term funding options.

Treasury highlighted recent enhancements to the BFI process, including a shift to four bid windows per year—up from one—allowing national departments, municipalities, provinces, and state-owned enterprises to apply more frequently for partial project funding. This shift aims to accelerate project preparation, expand the pipeline of bankable infrastructure initiatives, and attract co-financing from private investors.

The BFI evaluates projects through a rigorous screening methodology to determine eligibility for public funding, ensuring that only high-quality, economically impactful projects move forward. By pairing public capital with private investment, the government aims to strengthen infrastructure delivery capacity and close gaps in areas such as energy, transport, water, and social services.

National Treasury said the inaugural auction was priced in line with prevailing market conditions to optimise borrowing costs. It expects to tap the bonds in future auctions to support additional BFI-aligned projects, forming part of a longer-term strategy to deepen domestic capital markets and build sustainable financing instruments for South Africa’s infrastructure needs.