Capital is not the constraint; project readiness is, notes SAVCA CEO, Anusha Naidu

In his keynote address at the recent BlackRock South Africa Infrastructure Investment Summit, President Cyril Ramaphosa positioned South Africa’s ongoing reform agenda as a credible platform for long-term investment. With more than R1 trillion in infrastructure spend planned over the next three years, infrastructure is undoubtedly central to the country’s growth strategy. Once baseline infrastructure is secured, this creates further impetus for businesses to grow to their full potential.

Rather than a purely public-sector obligation, infrastructure is increasingly seen as a shared responsibility, requiring the mobilisation of institutional capital, technical expertise and innovative funding models. Already, Southern African allocators direct 42% of their Regulation 28 alternatives exposure to real assets and infrastructure, according to the SAVCA PE Survey 2025.

This is not a new opportunity for private capital either, with SAVCA’s data suggesting that infrastructure and energy-related funds attracted 71% of capital raised by private equity funds in 2025, while infrastructure and energy accounted for 40% of overall private equity deal value – making it the single largest sector by investment value last year.

South Africa benefits from a sophisticated institutional investor base, deep capital markets, experienced fund managers and an increasingly mature private capital ecosystem. These advantages position the country well to continue attracting both domestic and international capital into infrastructure projects.

We therefore do not believe the primary constraint in infrastructure investment is capital availability. The data shows that investors are not waiting on the sidelines – capital is already flowing into infrastructure opportunities, reflecting growing confidence in the sector's long-term investment potential.

The greater challenge now is developing a robust pipeline of bankable projects that provide investors with the certainty required to deploy long-term capital at scale.

Addressing this challenge requires a deliberate focus on project preparation, regulatory certainty and institutional capacity. For investors, this translates into the need for clarity on policy direction, consistency in execution and confidence that projects will move from concept to completion within defined timelines. Without this, even the most compelling investment narratives struggle to translate into deployed capital.

Encouragingly, there is growing evidence that these structural constraints are being addressed. Reforms in the energy sector, for example, have shifted the conversation from crisis management to system transformation. The unbundling of Eskom, the expansion of renewable energy programmes and the increasing role of private generation are beginning to reshape the electricity market.

At the same time, transmission – long recognised as a critical bottleneck – is increasingly opening up to private participation, creating new opportunities for investment and enabling additional capacity to come online. This is a significant structural shift and one that highlights the broader role that private capital can play beyond generation alone.

Similar dynamics are evident in other sectors. In water infrastructure, where ageing assets and governance challenges have constrained delivery, government is introducing reforms aimed at improving municipal accountability and creating space for private-sector participation through blended finance and public-private partnerships.

Digital infrastructure also stands out as a high-growth area, with South Africa already positioned as a regional hub for data centres, fintech and connectivity. As demand for digital services accelerates, investment in fibre, data infrastructure and supporting energy systems will become increasingly critical to sustaining economic growth and competitiveness.

What ties these sectoral developments together is a gradual but meaningful shift in policy approach. There is a clear recognition that infrastructure delivery at scale requires coordinated action between the public and private sectors. Forums such as the BlackRock Summit play an important role in this regard, creating space for alignment on priorities, risk allocation and implementation frameworks.

Private capital is well positioned to play a catalytic role in this process. Beyond funding, it brings discipline in project selection, governance and execution. It also introduces new financing mechanisms, including private credit and blended finance solutions, to bridge funding gaps and unlock projects that may not fit traditional financing models.

As infrastructure needs become more complex, investors are increasingly exploring these alternative financing structures. The future of infrastructure finance is therefore unlikely to rely on a single source of capital; it will require greater collaboration between public institutions, private investors and innovative financing approaches.

While many emerging markets are competing for capital, South Africa's institutional depth and financial market sophistication continue to differentiate it within the broader African investment landscape. The next phase will be defined by execution – ensuring that implementation keeps pace with ambition. If that can be achieved, infrastructure-led growth will move from ambition to reality, supported by a deepening partnership between the public and private sectors.