Cape Town Infrastructure Vision 2026: R120 billion industrial boom

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12-01-2026
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AS Cape Town enters 2026 on the back of record-breaking infrastructure spending in 2025, Mayor Geordin Hill-Lewis is making an audacious pitch: the Mother City is where Africa’s next manufacturing boom begins.

Cape Town has set a record for South African municipal infrastructure investment, spending R9.5 billion in the 2024/25 financial year. For Mayor Geordin Hill-Lewis, it’s about creating irreversible momentum that positions the Mother City as Africa’s premier industrial destination.

“Cape Town has outspent Joburg and Tshwane combined, R25 billion versus R22 billion, in this term of office,” Hill-Lewis told Cape Business News. “And we’re on track to outspend all three Gauteng metros combined by the end of the current financial year.”

The numbers tell a story of deliberate differentiation. While South Africa faces persistent socioeconomic inequality and electricity supply constraints, Cape Town is executing a R120 billion 10-year infrastructure pipeline that reads less like municipal housekeeping and more like industrial policy.

The industrial backbone takes shape

For manufacturers evaluating African expansion, three projects deserve close attention:

The R5.2 billion Potsdam Wastewater Treatment Works upgrade has reached 60% completion, with operational trials beginning in 2026. Beyond environmental remediation, the project doubles sewage treatment capacity from 47 to 100 million litres daily, fundamentally changing what’s possible in the Killarney industrial corridor.

“This is a critical project which doubles the sewer treatment capacity in this part of the city, enabling development and economic growth, including in the surrounding industrial and residential areas,” Hill-Lewis says.

For food processors in Montague Gardens, the timing couldn’t be better. Cape Town’s Water and Sanitation directorate spent 95% of its R4 billion capital budget in 2024/25. 

The city’s R600 million sewer project in Montague Gardens is nearing 2026 completion. This infrastructure transforms manufacturing feasibility in one of South Africa’s key industrial nodes.

The power equation

Perhaps most critically for 24/7 manufacturing operations, Cape Town serves approximately 70% of its geographic area with municipal electricity, not Eskom. “There is a legal and bureaucratic process to navigate with the national government, but we will keep pushing for this so that all of our metros can benefit from reliable electricity services,” Hill-Lewis says.

The competitive advantage is tangible. Cape Town’s electricity price increase is just 2% compared to Eskom’s 11.32% nationwide increase. Manufacturers can sell excess power back to the grid and participate in the city’s wheeling programme to trade energy, national firsts that materially impact operating economics.

The SEZ strategy

The Atlantis Special Economic Zone has attracted over R3 billion in investments and created over 800 jobs, with four large-scale investors fully operational. For green tech manufacturers, the value proposition is compelling: a 15% corporate tax rate, duty-free imports for renewable energy components, and Cape Town capturing 70% of South Africa’s renewable energy component manufacturing.

Hill-Lewis emphasises the broader support infrastructure: “More than R6.4 billion in investments and over 15,000 jobs were directly secured in 2024 via the City’s support to 11 Special Purpose Vehicles across sectors such as BPO, technology, clothing and textile manufacturing, and marine manufacturing.”

The execution risk question

When pressed on delivery risks for the R40 billion three-year capital investment, Hill-Lewis doesn’t sugarcoat it. “Of course, delivery risks abound, most notably construction mafia attempting to interrupt projects, and contractors failing to meet the requisite standard of work.”

But the track record provides ballast for confidence. Cape Town achieved 92.3% capital budget spending performance in 2024/25, execution rates that would be noteworthy in developed markets, let alone South Africa’s challenging construction environment.

The mayor points to completed projects as proof of concept: the R4 billion Zandvliet Wastewater Works upgrade, quadrupling of sewer pipe replacement, and phases of the new MyCiTi route expansion across the metro’s southeast.

The 60-second pitch

Asked to deliver his closing argument to a multinational manufacturer’s CFO evaluating African expansion, Hill-Lewis’s  response distils the strategy:

“If you want hands-on investment facilitation to cut red tape and incentivise your move to Cape Town, if you prefer reliable infrastructure in a city that is investing for future economic growth, if you desire peace of mind about good governance and a healthy municipal financial position, then Cape Town is your destination of choice on the African continent.”

The infrastructure investments are creating facts on the ground. The International Finance Corporation committed R2.8 billion to support Cape Town’s infrastructure programme, with an 18-year tenor that signals international confidence in the city’s fiscal management.

As Cape Town approaches the 2026 completion milestones for Potsdam, Montague Gardens sewerage, and other critical industrial infrastructure, the question for global manufacturers shifts from whether the city can deliver to whether they can afford to ignore what’s being built.