By Eamonn Ryan
The recent announcement of comprehensive infrastructure reforms by Minister of Finance Enoch Godongwana aims to position South Africa on a trajectory of robust economic growth, enhanced service delivery, and increased employment opportunities.

To bolster public infrastructure financing, the government aims to diversify funding sources through innovative mechanisms. © RACA Journal
This strategy is crucial for the HVAC&R (Heating, Ventilation, Air Conditioning, and Refrigeration) sector, which relies heavily on effective infrastructure for its operations.
These reforms are outlined in the Medium-Term Budget Policy Statement (MTBPS) and rest on four foundational pillars:
- Ensuring macroeconomic stability
- Implementing structural reforms
- Enhancing growth-focused infrastructure
- Building state capacity
Godongwana emphasised that growth-enhancing infrastructure investments are essential to stimulate economic activity, particularly in sectors like HVAC&R, where improved infrastructure can lead to more efficient energy use and service delivery.
To attract private investment and expertise, the government is making significant changes to its public-private partnership (PPP) regulations. These modifications aim to simplify the process for engaging private partners, which is particularly beneficial for projects related to HVAC&R systems in both commercial and residential developments.
Driving project delivery
A key aspect of the reforms is the establishment of dedicated capacity for project planning and preparation, ensuring a steady pipeline of initiatives that can be marketed to potential investors. Notably, initiatives from the Department of Water and Sanitation and the Department of Transport may create opportunities for HVAC&R applications, especially in water recycling and transportation logistics.
Godongwana highlighted the resolution of the Gauteng Freeway Improvement Project, unlocking a substantial project pipeline valued at R85 billion, which could encompass upgrades and expansions of transportation systems, thereby facilitating improved HVAC&R services.
A unified infrastructure approach
The government’s strategy includes reconfiguring the capital budgeting process into a centralised framework for managing large infrastructure projects that require fiscal backing. This centralised approach is expected to streamline the coordination between various government bodies, including the PPP office and the Infrastructure Fund, enhancing the efficiency of HVAC&R-related infrastructure developments.
Moreover, the National Treasury plans to introduce a continuous evaluation process for project proposals, starting in 2025, which will help HVAC&R projects secure funding more swiftly.
Expanding funding mechanisms
To bolster public infrastructure financing, the government aims to diversify funding sources through innovative mechanisms, including build-operate-transfer (BOT) structures. These strategies will support HVAC&R projects by offering private sector players a way to engage with public projects, potentially leading to more efficient service delivery.
The introduction of a blended finance risk-sharing platform, featuring a credit guarantee vehicle, will further support HVAC&R initiatives by reducing investment risks and government liabilities. This platform is expected to be operational by the end of 2025, providing crucial backing for projects that enhance HVAC&R systems, particularly in energy efficiency and sustainability.
The infrastructure reforms outlined in the MTBPS represent a pivotal step towards fostering an environment conducive to growth in the HVAC&R sector. By enhancing infrastructure investment, simplifying regulatory frameworks, and diversifying funding mechanisms, the South African government is setting the stage for improved energy efficiency and service delivery, ultimately driving economic growth and job creation across the country.