Roelof van den Berg
South Africa’s metros are absorbing a growing share of the country’s population, placing rising pressure on housing, transport, water, electricity, and other essential public services.
Given these pressures, public-private partnerships (PPPs), blended finance, and other alternative funding models are becoming increasingly important in delivering the infrastructure future metro populations will depend on.
The pressure is especially visible in Gauteng, where the City of Johannesburg’s population is expected to exceed 6.1 million by 2027, up from around 5.7 million residents in 2023, while Cities of Tshwane and Ekurhuleni continue to expand alongside it. Similar urban growth pressures are likewise being felt in KwaZulu-Natal and the Western Cape.
The Western Cape offers a particularly useful example of the scale of the infrastructure response required. More than R24 billion has been committed to infrastructure across the province between 2025/26 and 2027/28, with some R11.7 billion earmarked for the Cape Metro alone. Municipalities in the province are also increasingly turning to alternative funding, with borrowing for large-scale infrastructure projects having surged by 96.9% in 2024/25 from the previous year.
South Africa’s Metro Trading Services Reform is applying the principle more widely across metropolitan municipalities. The programme provides a R54 billion performance-linked incentive grant over six years to improve the operational and financial sustainability of water, electricity, wastewater, and solid-waste services. To access the funding, metros must meet targets in council-approved Performance Improvement Action Plans, and raise a matching R54 billion through improved own-source revenue and borrowing capacity. The programme is therefore intended to unlock up to R108 billion in metro infrastructure investment.
Models such as these could significantly extend the impact of public funding by strengthening services, improving borrowing capacity, and giving financing partners greater confidence to participate.
Building a metro-support financing model that works
Public funding will remain indispensable where social outcomes are just as important as, or even more important than, commercial returns. Development finance can also take a longer view and shoulder risks commercial funders may not, opening viable projects to institutional and private capital at a scale that would otherwise remain out of reach.
For metros to attract private capital, investors need confidence that projects can be delivered successfully, that revenue-generating services are financially sustainable, and that infrastructure funding is managed in a way that supports long-term system performance.
Metros must also turn long infrastructure wish lists into smaller pipelines of projects that are ready to finance and build, bringing to mind that old proverb about how to eat a large meal before you: one bite at a time. This means advancing feasibility work, approvals, and funding structures early enough for strong projects to move efficiently towards investment. The public sector’s expanding project-preparation support must help metros package these opportunities clearly and bring more of them to market in a finance-ready form.
On the private sector side, private and institutional investors must become involved much earlier. Banks, pension funds, insurers, and infrastructure investors know what level of revenue certainty, risk, and project information they require before committing capital. Bringing that knowledge into project preparation gives metros a better chance of designing viable projects from the outset instead of spending years developing proposals the market ultimately cannot finance.
Finally, metros need infrastructure programmes that survive annual budget cycles and changes in leadership. Investors committing capital over decades look for certainty that agreed projects, revenue reforms, and maintenance programmes will continue beyond the people currently occupying office. Building permanent delivery capability within metros will offer this certainty while protecting infrastructure planning from stalling.
To deliver on infrastructure’s promise of changing lives meaningfully and sustainably for generations to come, the challenge before us must be attacked holistically instead of silos, be it finance or institutional capacity. Ultimately, the metros that will “win” in the area of infrastructure development will be those who can maintain investor confidence and show internal capacity and excellence to execute these projects of time.
There is no time to lose.
Roelof van den Berg, CEO of Gap Infrastructure Corporation (GIC)