The government will gazette new regulations later in February to allow South Africa’s pension funds to invest more in infrastructure projects.
This is according to Deputy Finance Minister David Masondo, who made the announcement during the debate on President Cyril Ramaphosa’s State of the Nation Address in Parliament on Tuesday (15 February).
Amendment to Regulation 28
“We are also implementing several reforms this year that will unlock new investment in infrastructure by the private sector,” Masondo said in his speech.
“The process to amend Regulation 28 of the Pensions Fund Act to enable retirement funds to invest in infrastructure has been completed, and the Minister of Finance will gazette the amended regulations later this month.
“These amendments introduce more effective maximum limits for the trustees of retirement funds to invest for the long term, in various forms of infrastructure projects.”
‘Pipeline of projects’
The President has pinned his economic recovery efforts on higher levels of private investments, particularly in infrastructure projects.
Speaking during his SONA last week, he said the Infrastructure Fund and government entities are preparing a “pipeline of projects” with an investment value of R96 billion. They include student accommodation, social housing, telecommunications, water and sanitation, and transport.
“Several catalytic projects to the value of R21 billion are expected to start construction this year. Of this, R2.6 billion is contributed by government and the balance from the private sector and developmental finance institutions,” Ramaphosa added.
“Government will make an initial investment of R1.8 billion in bulk infrastructure, which will unlock seven private sector projects to the value of R133 billion.”
According to Masondo, the government has also finalised a review of Public Private Partnerships (PPP) regulatory framework “to improve the pace at which PPP projects are planned and to address regulatory challenges.”
“This will allow greater private sector participation and crowd in higher levels of investment,” he explained.