Hlabisa Advocates for Stronger Municipalities to Boost Infrastructure Investment
Minister highlights need for private financing to bridge infrastructure gaps in South Africa.
The Full Story
Updated Aug. 26, 2026, 9:13 a.m. | By Mmangaliso Khumalo The Minister of Cooperative Governance and Traditional Affairs, Velenkosini Hlabisa, says South Africa needs to attract more private and development finance to close its significant infrastructure gap, but warns that municipalities must first create an environment that creates investment confidence. Hlabisa was speaking at the 5th Sustainable Infrastructure Development Symposium of South Africa (SIDSSA) in Cape Town on Tuesday.
He said government alone does not have the resources to meet the country's infrastructure needs, and called for the greater use of a range of financing mechanisms. "South Africa's infrastructure needs are significant, and the government alone cannot provide all the capital needed to close the infrastructure gap. We therefore need to mobilize additional resources for finance, including development finance, blended finance, public-private partnership, infrastructure bonds, institutional investment and other appropriate financing mechanisms."
Hlabisa stressed, however, that attracting funding should not simply be about borrowing more money. “It is also to structure an affordable value-for-money investment that combines grants, municipal revenues, development finance and private capital in ways that do not impose unsustainable debt burdens on municipal balance sheets or compromise service affordability." Hlabisa says investor confidence will be critical to unlocking the capital needed for infrastructure development.
"Investors need predictable regulation, credible financial information, transparent procurement, reliable revenue models, clear risk allocation and capable project management. "Investors need confidence that municipal institutions have the capacity to manage complex infrastructure projects and honor their commitments." He said government therefore needs to focus on developing 'investable municipalities', rather than simply looking for funding for individual projects.
INFRASTRUCTURE MUST BE MAINTAINED Hlabisa also warned against focusing only on the initial construction costs of infrastructure. He said government and municipalities need to consider the entire lifecycle of an infrastructure project, from planning and construction through to operation, maintenance, renewal, and eventual replacement. "We must consider not only the cost of construction, but also the cost of operating, finishing, maintenance, renewal and eventual replacement."
Hlabisa said failure to plan for these costs could leave municipalities with infrastructure they are unable to maintain effectively. TECHNICAL PROJECTS MUST BECOME BANKABLE The Minister further emphasised that a technically sound project does not necessarily mean that investors will be willing to fund it. He said bankability depends on whether investors can clearly understand the risks, revenue model, regulatory environment and long-term commitments associated with a project. "Bankability requires an enabling institutional environment in which investors can understand the risks, revenue model, regulatory framework and long-term obligations associated with the investment."
The Minister's remarks come amid ongoing efforts by government to improve municipal performance and strengthen infrastructure delivery. He says greater collaboration between government, the private sector and development finance institutions will be essential to mobilising the investment needed to address South Africa's infrastructure deficit while ensuring that projects remain financially sustainable and affordable for communities. Massive R50 000 Secret Sound clue Can you guess the latest Secret Sound on Breakfast with Martin Bester? Music legend Dolly Parton's cause of death revealed The legendary artist passed away at the age of 80…
Why It Matters
The financial sustainability of infrastructure projects is crucial for South Africa's economic development. By fostering investable municipalities, the country can attract necessary capital, ensuring that infrastructure meets the needs of its communities while promoting growth.
What's Next
Ongoing discussions and collaborations between government and private sectors are expected to continue, focusing on developing frameworks for financial investments in infrastructure projects and improving municipal capacities to manage them effectively.