Although classified as an upper middle-income country, South Africa continues to confront high unemployment, coupled with widespread poverty and inequality. The situation is compounded by a recent protracted economic downturn and infrastructure deficits. South Africa’s National Development Plan calls for public infrastructure delivery to reach 10% of gross domestic product by 2030; however, current expenditures amount to less than half this target. Meanwhile, demand for infrastructure—energy, water, transport and communications—continues to swell, alongside the need for social services (including housing, education, and health care). As South Africa’s population grows, unrelenting urbanisation often results in unmet service delivery targets. The Investment Programme for South Africa (IIPSA) uses blended finance to enable infrastructure projects across South Africa, fostering regional connectivity and addressing critical development gaps.

The IIPSA programme supports the Government of South Africa to provide innovative financing that blends EU grants with loans from international Development Finance Institutions (such as France’s AFD, the Development Bank of Southern Africa, the European Investment Bank, and Germany’s KfW). IIPSA promotes innovation in infrastructure development, creating sustainable, resilient, smart, environmentally-friendly and inclusive infrastructure assets, and responding to the needs and interests of all people, including the most vulnerable. This investment program will benefit the wider South African region, as well as the freight industry and stakeholders.

The programme's goal is to support the South Africa’s National Treasury and the EU in coordinating, establishing, and updating a pipeline of credible infrastructure projects. The National Treasury and the EU Delegation intend to allocate about EUR 42 million in combination with loans from participating Development Finance Institutions.