1. Inner City Investment Initiative, 2011 Public Sector Funding National Treasury, 23 September 2011

2. 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

3. 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

4. Source of infrastructure finance, cont. Four broad options exist: borrowing, development charges, land leases and PPPs. 4

5. Trend in the municipal borrowing market 5

6. Debt service profile 6

7. 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

8. Land based financing strategies Municipal land sales Use municipal land as security Leaseholds on municipal land Land-use exchange 8

9. Public Private Partnership 9

10. 10

11. Thank you 11