Cape Town gets Moody’s Credit Rating Upgrade
01 July 2024
Cape Town Mayor Geordin Hill-Lewis has welcomed the City’s credit rating upgrade from a stable to a positive outlook by ratings agency
Moody’s Investor Services
The agency noted that good governance is enabling the City to fund major infrastructure investments due to the metro's healthy revenue collection rate keeping debt levels relatively low.
The agency expects Cape Town's financial performance to strengthen further, exceeding previous forecasts for the next 12 – 18 months.
Cape will invest R39,5bn in infrastructure over three years, as approved in its 'Building For Jobs' Budget. This is South Africa's largest ever three-year infrastructure investment by a metropolitan municipality. Lower-income households will directly benefit from 75% - or R9bn - of Cape Town's R12bn infrastructure spend in 2024/25.
The City estimates these investments will create 130 000 construction-related jobs over three years, building on the metro's current status of having SA's lowest unemployment rate.
'We welcome the ratings upgrade, which affirms Cape Town as the standout metro for good governance. This upgrade will further strengthen the City's ability to fund our record infrastructure investment, bringing down the costs of borrowing.
'Our pro-poor infrastructure spend of R9bn is bigger than the entire infrastructure allocation of any other metro. Cape Town will soon be SA's most populous city, and we are preparing for this by targeting our fastest-growing, and poorest areas, with infrastructure projects that will, over time, unstitch the unjust legacy of our country's past,' said Mayor Hill-Lewis.
The City's 10-year infrastructure pipeline is valued at an estimated R120bn, to be funded by a blended finance model leveraging the City's own healthy balance sheet, as well as finance from local and international markets.
In June 2024, City Council approved R3,5bn in infrastructure finance from Nedbank, and $150m from the International Finance Corporation (IFC), and in April 2023, greenlit €100 million developmental financing from the Agence Francaise de Developpement (AFD).
Infrastructure investment highlights over the next three years include:
- R6,5 billion in wastewater treatment works upgrades, over R1,5 billion in new water projects, and bulk sewer upgrades such as SA's largest on the Cape Flats Bulk sewer, as well as the Phillipi, Milnerton and Gordon's Bay lines.
- R6,28 billion for the major MyCiTi south-east expansion from Khayelitsha and Mitchells Plain to the southern suburbs
- R4 billion in electrical grid upgrades and maintenance to prepare for a dynamic, decentralised energy future
- R2,6bn in road maintenance and pothole repair, R735 million in road upgrades, and R444 million in congestion relief projects over three years
- R3,7 billion in informal settlement upgrades over the MTREF
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Published by:
City of Cape Town, Media Office
