South Africa has taken another important step towards addressing its infrastructure challenges following the signing of a Memorandum of Cooperation between the Infrastructure Finance and Implementation Support Agency (IFISA) and the International Finance Corporation (IFC). The partnership aims to unlock investment in critical water, sanitation, and waste management infrastructure projects across the country.

The collaboration forms part of a broader initiative supported by Switzerland’s State Secretariat for Economic Affairs (SECO) through its partnership with IFC’s Sustainable Cities Platform, demonstrating the growing role of international cooperation in advancing sustainable infrastructure development and improving service delivery in South Africa.

Addressing South Africa’s Infrastructure Funding Gap

South Africa currently faces an estimated infrastructure funding gap of approximately USD 243 billion, with significant investment required to modernise and expand essential public infrastructure. Among the most urgent priorities are water and sanitation systems, which are critical to economic growth, public health, environmental sustainability, and social development.

Reliable infrastructure serves as the backbone of economic activity. Water security, in particular, is fundamental to sectors such as agriculture, manufacturing, mining, tourism, and broader industrial development. Without adequate water infrastructure, economic productivity, competitiveness, and private sector investment opportunities become increasingly constrained.

The new agreement between IFISA and IFC seeks to address these challenges by strengthening project preparation, improving institutional capacity, and identifying investment-ready projects capable of attracting both public and private sector financing.

Strengthening Project Preparation and Investment Readiness

The Memorandum of Cooperation establishes a framework for collaboration focused on developing a stronger pipeline of infrastructure projects that can be successfully implemented and financed.

By combining IFC’s global expertise in infrastructure financing and project development with IFISA’s mandate to support infrastructure delivery in South Africa, the partnership is expected to accelerate the preparation and implementation of projects that address critical service delivery needs while creating opportunities for private investment.

Acting Chief Executive Officer of IFISA, Mohale Rakgate, highlighted the significance of the partnership in strengthening the country’s infrastructure development agenda.

“This partnership with IFC represents a significant step forward in strengthening South Africa’s infrastructure pipeline. By combining our efforts, we can better prepare and deliver projects that address critical service delivery needs while attracting private sector investment at scale,” said Rakgate.

Advancing South Africa’s Water Security

A key component of the collaboration builds on existing support provided through SECO and IFC’s Sustainable Cities Platform, particularly for the uMkhomazi Water Project Phase 1 Raw Water Component.

The project is being advanced in partnership with the Trans-Caledon Tunnel Authority and IFISA and is regarded as one of South Africa’s most important long-term water infrastructure initiatives.

Once completed, the uMkhomazi Water Project is expected to play a vital role in securing future water supply, supporting economic growth, and enhancing resilience against water scarcity challenges that continue to affect many parts of the country.

As one of the world’s most water-stressed nations, South Africa faces increasing pressure from population growth, urbanisation, climate variability, and aging infrastructure. Strategic investments in water systems are therefore essential to ensuring sustainable development and economic stability.

International Cooperation for Sustainable Development

IFC Regional Director for Southern Africa, Cláudia Conceição, reaffirmed the organisation’s commitment to supporting South Africa’s infrastructure ambitions and improving access to reliable services for communities.

“As one of the world’s most water-scarce countries, South Africa faces urgent and complex challenges. We are committed to increasing access to reliable water and sanitation services to communities by working alongside IFISA and the Government of South Africa on project preparation, institutional capacity building and identifying bankable projects that can attract the investment to meet the critical infrastructure needs,” she said.

The partnership reflects a growing recognition that collaboration between governments, development finance institutions, and the private sector is essential to closing infrastructure funding gaps and delivering sustainable solutions at scale.

Building a More Resilient Future

The IFISA-IFC partnership represents more than a financing arrangement; it is a strategic effort to strengthen South Africa’s infrastructure ecosystem, improve service delivery, and create a more resilient economy.

As the country continues to confront infrastructure challenges, initiatives that promote investment-ready projects and encourage public-private collaboration will be critical in ensuring reliable water and sanitation services for communities while supporting long-term economic growth.

Through partnerships such as this, South Africa is positioning itself to unlock new investment opportunities, strengthen water security, and build the infrastructure necessary for a sustainable and prosperous future.