The South African government has signed a US$1.5 billion (approximately R27 billion) Development Policy Loan Agreement with the World Bank, aimed at supporting major infrastructure reforms, stimulating economic growth and creating jobs.
According to National Treasury, the funding will help South Africa address long-standing infrastructure constraints that continue to hamper economic growth and employment. The agreement marks the country’s fourth Development Policy Loan with the World Bank and forms part of ongoing efforts to tackle low economic growth and persistently high unemployment.
The loan will support reforms in the electricity, freight and logistics, as well as water and sanitation sectors, with government saying these are critical to improving service delivery and boosting investment.
“The Government of South Africa and the World Bank have signed a US$1.5 billion Development Policy Loan Agreement aimed at supporting South Africa’s efforts to achieve inclusive growth by tackling infrastructure constraints, the primary barrier to job creation,” Treasury said.
National Treasury said the financing is anchored on three key structural reform pillars: strengthening energy competitiveness and security, upgrading freight transport services, and improving the efficiency of water and sanitation services.
“The loan support is anchored on three key pillars of structural reform: strengthening energy competitiveness and security, upgrading freight transport services, and delivering efficient water and sanitation services, reforms which are identified to boost growth and job creation,” the department said.
Treasury added that the financing terms align with the country’s borrowing strategy, offering favourable interest rates and flexible repayment conditions that will help contain debt-servicing costs.
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