While South Africa has taken meaningful steps to invest in infrastructure projects, Deputy Minister of Finance, Dr David Masondo, says the fiscus cannot afford to financially support the amount of investment required for climate-resilient infrastructure.
“We therefore need to discuss other innovative financing mechanisms such as green bonds and carbon credit to fund these climate-resilient infrastructure projects,” Masondo said on Monday in Johannesburg.
He made these remarks during the second in a series of Southern Africa – Towards Inclusive Economic Development (SA-TIED) policy dialogues entitled “Financing infrastructure development in the context of climate change”.
“In South Africa, we feel the negative impact of climate change in important sectors such as agriculture, water, and energy. The frequency of natural disasters and the results thereof are felt every day in our country.
“Investments in renewable energy sources, water conservation systems, and sustainable urban development are key to mitigating and adapting to climate impacts,” the Deputy Minister said.
Masondo said the Infrastructure Fund is a testament to South Africa’s commitment to stimulating infrastructure investment and blending public and private financing to build a better, more sustainable future.
“The Infrastructure Fund stands out as a pivotal move, designed to stimulate investment across various critical sectors. This approach seeks to mobilise public and private resources, mitigate risks for private investors and foster an environment where collaborative financing models can thrive.
“Such measures are part of a broader effort to ensure that infrastructure development not only supports South Africa’s immediate economic needs but also lays the groundwork for long-term resilience and progress.
“Yes, challenges exist such as securing funding. However, ensuring sustainability, and integrating the latest technologies are other additional challenges. These challenges should be treated as opportunities for innovation and forging robust public-private partnerships. This is also an opportunity for leveraging the power of technology in our infrastructure development goals,” Masondo said.
He said the groundbreaking research produced by the SA-TIED program has shed light on critical areas like water, and energy, and the broader connections between them.
“It is this type of research that directly shapes our infrastructure strategies, informing decisions to maximise impact and create the conditions for sustainable growth. The research informs our policy decision-making. It is this type of research that directly shapes our infrastructure strategies, informing decisions to maximize impact and create the conditions for sustainable growth,” the Deputy Minister said.
He said infrastructure development is the cornerstone of any thriving economy.
“Infrastructure fuels productivity (e.g. people arrive late to work because public transport is poor). Infrastructure also enhances the quality of life for our citizens (clean air, and clean water are important for our health) and lays the foundation for long-term growth.
“Our government recognises this. We have made significant investments in critical infrastructure. These investments are not just about roads and bridges. They are also about creating jobs, reducing poverty, and making South Africa a competitive player in the global economy,” the Deputy Minister said.
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