National Treasury Publishes Sovereign Use of Proceeds Framework

Posted 29 May 2026 Written by Acts Online
Category Finance

Brought to you by SAnews: The National Treasury has published its Sovereign Use of Proceeds Framework and accompanying Second Party Opinion, establishing the regulatory and operational basis for issuing thematic sovereign funding instruments, including green bonds.

In terms of its mandate to manage domestic and foreign debt under the Public Finance Management Act, No. 1 of 1999, the National Treasury’s new framework aligns with international sustainable finance principles. It defines eligible expenditure categories, governance arrangements, and reporting protocols for future use-of-proceeds instruments. Developed with the support of Rand Merchant Bank, J.P. Morgan, Theza Capital, and Capital Link, the framework serves as the foundation for potential ZAR- and USD-denominated sovereign green, social, or sustainable bonds.

Any issuance under the framework remains subject to internal readiness processes within the National Treasury. These prerequisites include:

  • Confirmation of a robust pipeline of eligible green and social expenditures;
  • Establishment of operational reporting systems to track the allocation of proceeds; and
  • Implementation of appropriate governance structures to oversee compliance.

National Treasury intends to expand the framework over time to accommodate sustainability-linked financing, allowing the government to access both project-based and target-linked instruments depending on market conditions and investor demand.

The framework and opinion can be accessed directly on the National Treasury Investor Relations portal.

What this means for you, your business, or your clients

  • For yourself: No direct individual compliance obligations; however, professionals advising on public finance or sustainable investment must familiarise themselves with the eligible expenditure criteria outlined in the framework.
  • For your business: Financial services firms, asset managers, and legal advisors should align their ESG investment mandates and advisory frameworks to accommodate upcoming ZAR- and USD-denominated sovereign green bonds.
  • For your clients: Corporate clients engaged in public-private partnerships or state-funded infrastructure projects should monitor eligible expenditure categories to position their projects for potential funding under this sustainable finance framework.

Originally published at https://www.sanews.gov.za/south-africa/government-publishes-sovereign-use-proceeds-framework

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