Citibank South Africa plans to increase its investment in the Vaal, Gauteng, to almost R1.4 billion.
- Citibank South Africa plans to increase its investment in the Vaal, Gauteng, to almost R1.4 billion.
- It is planning a multi-decade aerotropolis project that will include a new international airport.
- It has already applied for rezoning the area it wants to develop into a special economic zone.
- For more financial news, go to the News24 Business front page.
The local arm of US banking group, Citibank South Africa, has pledged R1.375 billion to develop a new infrastructure project in the Vaal area of Gauteng, which will include a new “sizeable” international airport.
Citi South Africa’s Chief Country Officer, Peter Taylor, believes that this investment for an aerotropolis will be a catalyst for additional investments that will bring manufacturing and agriculture hubs to the Vaal. He addressed the media on Thursday at an event with the Department of Trade, Industry and Competition (dtic).
Taylor also announced an additional R200-million investment from Citibank SA towards developing black industrialists in the Vaal area.
An aerotropolis is an area where most of the infrastructure, including for suppliers, distributors and other related companies, is built around an airport.
“This is a massive infrastructure project. The timing of the airport itself will depend on a few things: the zoning, the licensing, the authority for the port, etc. But a lot of work has gone into this. A lot of those [things] are being finalised. We are making an application for an SEZ (special economic zone), which will encompass this area that the airport will be built in,” said Taylor.
The bank, which opened its first office in SA in 1920 under the National Bank of New York brand, envisages that this new port of entry would be situated in a new special economic zone (SEZ). Taylor said it would be “a pretty sizeable airport”.
The additional R200 million is to support Citi’s existing investment in a major mixed-use urban development in that area. Citibank SA is a partner in that project.
The banking group approached the dtic about complementing the mixed-use development with an industrial component to bring more services and create more jobs for locals. They agreed on making this possible using the dtic’s Equity Equivalent Investment Programme.
The money is likely to be disbursed to black industrialists either as grants in exchange for equity, loans, concessional finance, blended finance or a combination of those, said the Minister of Trade, Industry and Competition Ebrahim Patel. The dtic has yet to decide how to administer it, but it has identified the IDC as the preferred administrator.
“The idea would be to have it stretched as fast as possible and bring more black South Africans into manufacturing,” said Patel.
Taylor said Citibank also envisages that social housing, student accommodation and other services will follow once the rezoning is done and critical bulk infrastructure is in place. He said there are a lot of other investors – commercial players from different countries – who have indicated that they’ve set money aside to participate in projects with elements of environmental, social and governance uplifts like this one. He said the money is just waiting for viable projects.
“We love the fact that it’s happening in an area that has been previously underserved, and we believe that that the initial investment that we are making will be a catalyst to further investment which is envisaged over a multi-decade period and could total more than 30 times the amount of our initial investment,” added Taylor.