South Africa has raised R11.8 billion ($693 million) in its first-ever infrastructure bond sale, attracting bids of more than double the amount on offer and signalling strengthening investor confidence as fiscal and structural reforms gather pace.
According to a statement from the National Treasury on Tuesday, the government sold R7 billion in 10-year notes at a yield of 8.575%, alongside R4.8 billion in 15-year debt priced at 9.13%. Total bids exceeded R26 billion ($1.5 billion), marking one of the strongest auctions of rand-denominated debt this year.
The issuance forms part of President Cyril Ramaphosa’s push to revive South Africa’s stagnating economy through large-scale investment in ports, rail, electricity and water systems. The government aims to lift annual GDP growth to 3.5% by 2030, up from an average of less than 1% over the past decade.
Consolidation and reforms attract inflows
The successful auction comes on the back of improving fiscal sentiment. Treasury’s medium-term budget update last month showed stronger-than-expected revenue collection and a renewed commitment to fiscal consolidation after years of slippage.
Investor appetite has also benefited from a stabilisation in energy supply. Scheduled power cuts, which had been a defining drag on the economy, have been virtually absent since early last year following increased private generation and operational improvements at Eskom.
Early signs of a recovery in logistics have lent further support. Preliminary data from the South African Revenue Service show that exports rose 2.8% in October to R192.2 billion ($11.11 billion, helping offset a 7.6% increase in imports and producing a monthly trade surplus of R15.6 billion ($902 million)
The funds raised from the bond will be channelled into the government’s Budget Facility for Infrastructure, an expanded mechanism designed to screen, prioritise and finance strategic projects.
“The proceeds from the Infrastructure and Development Finance Bond will be used exclusively for BFI-linked investments, and such notes will be tapped in future auctions to support additional projects,” the statement seen by Bloomberg read.
The bond sale also coincides with renewed private-sector interest in South Africa’s transport and logistics rebuild.
Earlier this month, Traxtion, Africa’s largest private freight-rail operator, announced a planned investment of R3.4 billion ($199 million) to nearly double its locomotive fleet in the country. The company operates in ten African markets but sees South Africa as its most significant expansion opportunity, given the scale of Transnet’s capacity gaps.
Credit momentum builds
Sentiment has been further bolstered by S&P Global Ratings’ upgrade of South Africa’s long-term foreign-currency rating to BB from BB-, the country’s first upgrade by the rating agency since 2005. S&P cited improving growth prospects, early signs of reform traction and a better-than-expected fiscal path.
Investor confidence was also evident last week when a separate $3.5 billion sovereign dollar-bond issuance drew demand nearly four times the amount offered.
With the debut infrastructure-bond auction now complete, Pretoria is preparing additional auctions before the year runs out, betting that a credible reform path and improving operational conditions will keep capital flowing.
NB: Local currency figures were converted to US dollars using monthly average exchange rates for October 2025, R17.3/$1 and the rate as of December 9, 2025, R17.1/$1.
