Infrastructure investment race reshapes SA's economic future, says Energy Department

INFRASTRUCTURE DEVELOPMENT SUBESH Pillay, acting directorgeneral at the Department of Electricity & Energy, said despite significant infrastructure spend allocation over the mediumterm, there was underspending and fruitless spending of these budgets, most profoundly in municipalities. I SUPPLIED Infrastructure investment race reshapes SA's economic future, says Energy Department YOGASHEN PILLAY INFRASTRUCTURE is fast emerging as a principal battleground for global economic competitiveness, industrial strength and national resilience, according to Subesh Pillay, acting directorgeneral of the Department of Electricity and Energy. Delivering a keynote address at the Consulting Engineers South Africa Infrastructure Indaba in Durban on Wednesday, Pillay said governments across the world are increasingly recognising a longstanding truth: modern economies are fundamentally built on the reliability and scale of infrastructure systems. "Electricity networks, logistics corridors, water systems, and digital infrastructure form the physical backbone upon which economic activity depends' This growing awareness is now being matched by unprecedented levels of investment. Citing estimates from the Global Infrastructure Hub, Pillay noted that the world will require roughly $94 trillion in infrastructure investment by 2040 to sustain growth and meet development needs. Within the energy sector alone, spending has surged. Data from the International Energy Agency shows that global energy investment has exceeded $3trin annually in recent years, driven by profound structural shifts in the global economy. Pillay identified three key forces behind this surge. The first is the rapid electrification of economic activity, with electricity increasingly replacing other energy sources across transport, industry and buildings. The second is the digitalisation of economies, which is significantly boosting electricity demand through data centres, advanced manufacturing and digital infrastructure. A third, underlying factor is the transition to cleaner energy systems, which is reshaping how and where infrastructure is deployed. "It means that infrastructure delivery is no longer simply a domestic planning exercise. It takes place within a highly competitive global environment in which capital, technology, and manufacturing capacity are increasingly contested." He explained that infrastructure systems sit at the intersection of multiple forces, including state capability, regulatory frameworks, capital markets and industrial policy. Engineers, financiers, regulators and governments must all work in coordination to deliver complex, largescale projects. Adding to this complexity are shifting geopolitical dynamics. Pillay noted that global supply chains for energy infrastructure are becoming more strategic, with major economies competing for control over critical minerals essential for renewable technologies, batteries and power electronics. ' Oa S A NM C6