France and Germany pledge R5.6b loan for municipal infrastructure reforms
National treasury's metro trading services reform receives a major boost to tackle electricity and water backlogs across eight metropolitan municipalities.
German and French development agencies have committed €300m (about R5.6b) in concessional loans to national treasury’s metro trading services reform.
Johannesburg is among the eight metropolitan municipalities covered by the programme, with the eight metros serving more than 22 million residents. Treasury links their financial sustainability to South Africa’s economic growth.
Read more: Government releases municipal funds to protect essential services
KfW Development Bank will provide €200m and Agence Française de Développement €100m.
The funding is meant to improve electricity, water supply and sanitation, and solid waste services so that revenue is reinvested in infrastructure and outages and investment backlogs are reduced.
The loans also sit under France and Germany’s just energy transition (JET) mandate and will support the municipal part of the JET investment plan, which is intended to unlock further public and private investment in electricity distribution networks.
KfW has already lent Johannesburg and Cape Town €350m over the past two years for grid upgrades and renewable energy integration.
Also read: Here are low-cost business ideas to curb unemployment in Johannesburg townships
Agence Française de Développement has a long-standing lending relationship with Johannesburg, eThekwini and Cape Town for municipal infrastructure, inequality reduction and climate resilience.
Finance Minister Enoch Godongwana said the money strengthens the government’s push for better governance, financial sustainability and operational performance of essential trading services.
KfW country director Cornelia Tittmann said South Africa’s success matters to Europe, while Agence Française de Développement regional director Marie-Hélène Loison said the programme should protect urban investment and deliver better services for residents and businesses.
Both thanked the World Bank and SECO for helping treasury design the first-of-its-kind reform.
Follow us on our Whatsapp channel, Facebook, X, Instagram and TikTok for the latest updates!
