National treasury secures $1b NDB loan for South African metro services
A major international loan agreement will boost water, electricity, and waste delivery across South Africa’s metropolitan municipalities.
South African metropolitan municipalities are set to receive support to improve the delivery of water, electricity, and waste services following the signing of a $1b (about R18b) international loan.
The metro trading services reform programme is a government-led initiative aimed at improving the governance, financial sustainability, and operational performance of municipal trading services in metropolitan municipalities, particularly in water and sanitation, electricity and energy, and solid waste management.
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The New Development Bank (NDB) is financing the programme, together with the World Bank, the Asian Infrastructure Investment Bank, KfW Development Bank, and the French Development Agency.
The financing supports a performance-based reform programme implemented through South Africa’s existing legal, fiscal, and institutional framework.
Disbursements are linked to institutional strengthening and the achievement of independently verified measurable performance targets approved by metro councils for their trading services.
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The NDB loan offers favourable concessional terms, including a nominal value of $1b, a maturity of 16 years, a three-year grace period, and an interest rate of the daily secured overnight financing rate plus 1.18508%.
The loan was prepared in co-ordination with development partners active in South Africa’s infrastructure sector.
National Treasury extended its appreciation to the NDB for supporting the government-led reform towards better services for residents and stronger, more sustainable cities.
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