Germany supports Urban Development Financing Conference

Written by Godje Bialluch and Gereon Kaus

The Ministers of Finance and Cooperative Governance and Traditional Affairs co-hosted the Urban Investment Partnerships Conference in Johannesburg on 27 and 28 August 2015.  The conference served as an initiator of a deep and results oriented partnership between the private sector, national and local government; particularly financial institutions including the major investors in the urban space. The conference was attended by representatives from the private and public sector in South Africa. It aimed to strengthen the cooperation between participants on urban investment needs and opportunities. Germany provided support through two guest speakers. Professor Jan Werner from the University of Applied Science in Iserlohn, Germany, presented international practices on municipal borrowing, and shed light on the German system of land value capture. Dr. Oliver Weigel, Division Head within the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety, introduced partnerships on urban development between the public and private sector in Germany. His visit also marked the beginning of a new cooperation programme between the German Ministry and the Department for Cooperative Governance in South Africa.

Cities are highly important centres for economic activity and play a vital role in enabling private sector activity. Adequate, timely and efficient delivery of infrastructure and services in the right locations enhances the quality of urban life and attracts investment. To promote investments, the public sector needs to create an enabling environment and strategically target urban spaces that promote growth.

The South African government has introduced programmes that support cities in promoting private and public sector investments in infrastructure and services – like water, electricity, housing, roads and public transport – that enhance quality of life. This is to allow better partnerships between the private and public sector. Germany – through the GIZ implemented Governance Support Programme (GSP) – provides technical cooperation support in several of these initiatives. For example the Cities Support Programme assists cities in generating bankable projects and programmes (that are well defined, on which feasibility studies have been conducted with clear policy and regulations). Inter-departmental working groups led by National Treasury are busy reviewing the infrastructure grants and own revenue sources available to urban municipalities.

Following the conference, the establishment of a continuous dialogue between investors, cities and government is planned in order to leverage these support initiatives.