Finance minister Enoch Godongwana’s Medium-Term Budget Policy Statement (MTBPS) places infrastructure investment, municipal reform and private-sector participation at the centre of South Africa’s economic recovery.
Here are the five most significant developments and their implications for the sector.1. More than R217 billion in infrastructure projects supported by IFISA
The Infrastructure Finance and Implementation Support Agency (IFISA), which began operating on 1 April 2026, is already supporting projects across all spheres of government with a potential investment value exceeding R217 billion. The agency combines project preparation, financial structuring and infrastructure advisory services to accelerate delivery. Why it matters: Poor project preparation and lengthy approval processes have historically delayed infrastructure development. IFISA could help bring bankable projects to market faster, creating opportunities for engineers, contractors, consultants and private investors. Importantly, the R217 billion represents potential project investment value, not funding already spent or committed.2. Municipal public-private partnerships set for expansion
68 Projects in the PPP pipeline 31 Municipal PPP projects Amended Municipal PPP Regulations have been submitted to Parliament for a 30-day scrutiny period, the final step before implementation. The reforms aim to simplify procedures, reduce transaction costs and make private-sector participation more accessible to municipalities. Why it matters: This could open significant opportunities in municipal water, sanitation, waste management and other infrastructure services, particularly where municipalities lack the financial or technical capacity to deliver projects independently.3. R887 billion infrastructure grant review exposes delivery failures
National Treasury reviewed R887 billion transferred to provinces and municipalities through infrastructure conditional grants between 2017/18 and 2023/24.
The findings revealed that, although most funds were spent, many projects were delayed, incomplete or failed to deliver their intended benefits.
Government is now reforming the grant system to strengthen planning, accountability and oversight. Why it matters: This signals a shift from measuring infrastructure performance through expenditure to assessing whether projects are completed, functional and delivering reliable services. It also raises important questions about municipal project management, engineering capacity, contractor performance and maintenance.4. Billions more for municipal services and smart meters
R21.8 billion Additional local government equitable share funding for higher bulk costs of free basic services R3.5 billion Additional funding for smart meters over the medium-term expenditure framework, on top of R2 billion already allocated Municipalities are also being incentivised to reinvest revenue from water, electricity and waste services into the infrastructure supporting those services. Why it matters: The smart-meter investment could improve billing accuracy, revenue collection and municipal financial sustainability. More importantly, reinvesting service revenue into infrastructure could help address the longstanding maintenance and refurbishment backlog. This is particularly relevant to the financial sustainability of municipal water and electricity utilities.5. Infrastructure funding and maintenance receive renewed attention
The speech confirms several significant infrastructure financing developments:- More than R100 billion in fiscal support approved through the Budget Facility for Infrastructure (BFI).
- Over R14 billion raised through the infrastructure bond since December 2025.
- R20 billion earmarked for infrastructure projects currently being evaluated through the BFI.
- Payments for capital assets projected to grow by 5.3% annually, making them the fastest-growing budget expenditure category.
