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Published byAlexis Bowhay Modified over 8 years ago
Inner City Investment Initiative, 2011 Public Sector Funding National Treasury, 23 September 2011
Source of infrastructure finance The primary sources of infrastructure finance available to municipalities are: internally generated funds and national transfers from government. However, these are insufficient to meet the scale of infrastructure investment required by municipalities. 2
Source of infrastructure finance, cont. There is thus a need for municipalities to explore ways of leveraging private finance to mobilise additional resources to fund infrastructure investments. 3
Source of infrastructure finance, cont. Four broad options exist: borrowing, development charges, land leases and PPPs. 4
Trend in the municipal borrowing market 5
Debt service profile 6
Development charges The municipal infrastructure required to support new property developments is typically very costly. There are essentially two approaches to financing it: –Municipal borrowing –Property developer 7
Land based financing strategies Municipal land sales Use municipal land as security Leaseholds on municipal land Land-use exchange 8
Public Private Partnership 9
Thank you 11
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