Africa’s largest market to launch project bonds in March

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The Johannesburg Stock Exchange (JSE) building in Sandton. It has operated as a market place for the trading of financial products for nearly 125 years.

Africa’s largest bourse, the Johannesburg Stock Exchange (JSE), will begin listing “project bonds” from mid-March, an official said on Monday, giving institutional investors a window to invest in infrastructure projects.

The bonds will provide private firms a chance to get a foothold in infrastructure projects in Africa’s most industrialised economy, where project financing has traditionally come from banks and government.

“We launch Project Bonds in the second week of March,” said spokeswoman Pheliswa Mayekiso, adding that details of the listing would be made public closer to the launch.

“Government and banks alone cannot fund South Africa’s infrastructure programme,” the Treasury said in a review of the 2018 budget released last week.

“These bonds will be underpinned by the cash flows of a ring-fenced project, such as infrastructure or energy projects,” it said.

Capital markets have already reduced lending to some state-owned companies, such as sole power supplier, Eskom.

South Africa plans to spend billions of dollars over the next three years to build and revamp roads, power stations and ports.

Suzan O.