South Africa has secured a $1 billion loan from the New Development Bank to finance infrastructure upgrades and governance reforms across its eight metropolitan municipalities, as the government moves to address long-standing gaps in basic service delivery.
The National Treasury announced the agreement on Tuesday, saying the funds would support the Metro Trading Services Reform Programme, which targets water and sanitation, electricity and energy, and solid waste management in the country’s largest cities.
The loan carries a 16-year maturity with a three-year grace period, at an interest rate of the daily Secured Overnight Financing Rate plus 1.18508%. It is structured as a performance-based facility, meaning funds will only be disbursed once independently verified targets approved by metro councils have been met.
The NDB is co-financing the programme with the World Bank, the Asian Infrastructure Investment Bank, KfW Development Bank and the French Development Agency, in what officials described as a coordinated effort by development partners active in South Africa’s infrastructure sector.
The eight metros covered by the programme — Buffalo City, Cape Town, Ekurhuleni, eThekwini, Johannesburg, Mangaung, Nelson Mandela Bay and Tshwane — collectively serve more than 22 million residents.
The NDB was established by the BRICS members — Brazil, Russia, India, China and South Africa — in 2015 to mobilise resources for infrastructure and sustainable development projects in emerging markets.
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