South Africa’s National Treasury has received over 100 proposals from international investors for its $500 million foreign currency financing initiative, as the government seeks to diversify its funding sources beyond traditional Eurobond issuances.
Announced in July, the initiative is designed to explore alternative financing instruments to support Africa’s most industrialized economy. The Treasury said it is open to bilateral term loans, private placements, structured notes, and financing options linked to environmental, social, and governance (ESG) objectives.
“The market response to our call for proposals has been positive, demonstrating clear appetite for the National Treasury to diversify its foreign currency funding sources,” said Terry Bomela-Msomi, Director of Treasury Funding & Capital Markets, in an interview with Reuters.
According to Bomela-Msomi, there has been strong interest from both sell-side and buy-side institutions, boutique investment banks, and non-financial lenders willing to extend credit to the South African government. She highlighted that a significant portion of submissions focused on ESG-related financing, which aligns with the Treasury’s goal of developing a sustainable funding framework.
“The minimum funding target of $500 million will be comfortably met through this process,” Bomela-Msomi added, noting that Eurobonds would continue to play a complementary role in the Treasury’s broader debt strategy.
South Africa last accessed international capital markets in November 2024, successfully raising $3.5 billion. Analysts at Standard Chartered anticipate that the country could issue new hard-currency bonds in November following the release of its medium-term budget policy statement.
Borrowing conditions are currently favourable for African sovereigns. Nigeria, for example, is seeking parliamentary approval for $2.3 billion in loans and a $500 million debut sovereign sukuk, with plans to issue an international bond later this year. Meanwhile, Angola has tapped private creditors to fund large infrastructure projects, including a new oil refinery, and recently raised $1.75 billion through dollar-denominated bonds.
