South African state-owned airports operator’s R21.7 billion infrastructure plan

South Africa’s state-owned airports operator plans to use its cash reserves to fund the first two years of a R21.7 billion infrastructure program that includes refurbishing airports.

Airports Co. South Africa will turn to capital markets for financing from the third year of the project, Chief Financial Officer Luzuko ​Mbotya said in an interview.

“In the first few years, we do not anticipate going to the markets,” Mbotya said. “We’re actually sitting in a very favourable cash position right now. Our plan is to utilize our own cash reserves to fund the first two years.”

The company has cash reserves of R4.6 billion, and plans to spend about R10.1 billion in the first three years of the five-year project, Mbotya said. It intends to refinance two of its bonds maturing in 2028 and 2029, he said.

Acsa’s infrastructure drive includes the construction of new cargo and passenger terminals at OR Tambo International Airport in Johannesburg, as well as runway realignments and terminal expansions at Cape Town International Airport, Chief Dawid Stuurman International Airport in Gqeberha and King Phalo Airport in East London.

“This is the largest allocation since the preparations for World Cup 2010,” Acsa Chief Executive Officer Mpumi Mpofu at the company’s earnings presentation on Thursday. “You will see a change in our airports that is as big as we did when we were preparing for the World Cup.”

Acsa swung to a profit of R472 million for the year through March 2024, from a loss of 466 million rand the previous year.