Treasury raises R11.8bn in first-ever Infrastructure and Development Finance Bond

South Africa has taken a major step toward boosting long-term infrastructure investment after the National Treasury successfully raised R11.795 billion in the country’s first sovereign Infrastructure and Development Finance Bond.

The landmark issuance, announced on Tuesday, attracted strong market appetite, with bids exceeding R26bn, more than double the amount on offer, resulting in a 2.2-times subscription rate.

Treasury said the strong demand demonstrates investor confidence in the State’s redesigned infrastructure financing strategy.

The bond forms part of a series of reforms unveiled in the 2024 Medium Term Budget Policy Statement, aimed at expanding investment in critical infrastructure to support economic growth and improve service delivery.

The proceeds of the bond will be channelled exclusively into projects under government’s Budget Facility for Infrastructure (BFI).

The BFI is a specialised mechanism within the budget process that screens, selects and supports high-priority national infrastructure projects. In 2025, the government overhauled the BFI to accelerate delivery, expanding the system from a single annual bid window to four bid windows per year.

This enables national departments, municipalities, provinces and State-owned companies to apply for partial project funding more frequently, helping them leverage additional private-sector investment.

Treasury said this approach will strengthen the scale and quality of South Africa’s infrastructure pipeline while embedding private-sector participation in project delivery.

Two maturities were issued in the inaugural auction: RI2036: R6.996 billion at 8.575%; RI2041: R4.799 billion at 9.13%.

The allocation was made in line with prevailing market conditions to optimise borrowing costs, Treasury noted.

The Infrastructure and Development Finance Bond forms part of government’s broader funding strategy to develop long-term capital market instruments that can “crowd in” private investment toward priority public infrastructure.

Treasury plans further taps of these bonds in upcoming auctions to continue funding BFI-aligned projects across sectors such as energy, water, transport, and municipal infrastructure.

It said the initiative represents a critical milestone in reshaping South Africa’s infrastructure financing landscape at a time when the country faces chronic backlogs in infrastructure maintenance, expansion and modernisation.

Treasury said the new bond series will play a central role in mobilising capital for infrastructure that supports economic development and improves service delivery across the country.