South Africa turns to Gulf sovereign funds for R155bn state property company
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Public Works Minister Dean Macpherson says Middle East wealth funds have advised South Africa to set up a fundraising vehicle for the new state company that will manage its R155 billion property portfolio.
Middle East sovereign wealth funds have advised South Africa to create a fundraising vehicle as part of a plan for a new state firm that will manage its R155 billion ($9.5 billion) property portfolio, Public Works and Infrastructure Minister Dean Macpherson said in a Bloomberg TV interview.
Authorities recently held discussions with the Johannesburg Stock Exchange about how to establish a development fund to raise money for projects, after taking advice from sovereign wealth funds in the Gulf whose identities Macpherson did not disclose. President Cyril Ramaphosa first announced the establishment of the South African National Property Company, which will oversee 88,000 buildings and 5 million hectares of land, in February.
Speaking from Dubai, where he is due to meet potential investors this week, Macpherson said government cannot fund the entire infrastructure pipeline itself and that external funding will be important, adding there is a big appetite within the Middle East to invest. South Africa needs about R1.6 trillion in public-sector investment and an additional R3.2 trillion from private companies to meet its infrastructure targets by 2030.
The minister said South Africa remains committed to opening an office for its infrastructure development agency in the Middle East, most likely in Dubai, and aims to do so sooner rather than later. Infrastructure South Africa last year presented investment opportunities across energy, water and logistics to wealth funds, state entities and government ministries in the UAE, Kuwait, Saudi Arabia and Qatar.
Officials are focused on boosting construction to revive a sluggish economy and to restore public finances after years of corruption, mismanagement and bailouts of struggling state-owned companies. Macpherson said the country has a R350 billion construction book and expects procurement and construction on projects to start within 12 to 18 months.