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A formal assurance issued by the South African government—typically through the National Treasury—that it will assume responsibility for a state-owned entity’s (SOE’s) debt or financial obligation if that entity fails to meet its commitments. This instrument is used to enhance the creditworthiness of public institutions, enabling them to secure funding on more favorable terms.
In South Africa, government guarantees are often extended to entities like Eskom or Transnet to support large-scale infrastructure or capital expenditure programs. These guarantees are governed by a framework agreement and are subject to strict conditions, including annual limits (e.g., R30 billion per annum) and oversight by the National Treasury. The issuing of a guarantee does not immediately result in government expenditure—it becomes a liability only if the guaranteed party defaults.

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