The government of South Africa has signed a $500 million sovereign-backed loan agreement with the Asian Infrastructure Investment Bank (AIIB) to overhaul deteriorating municipal infrastructure across the country’s eight metropolitan cities.
The financing will support the Metro Trading Services Programme, aimed at improving water and sanitation, electricity and solid waste services for approximately 22 million residents who generate 85 percent of South Africa’s economic output.
“By strengthening municipal governance and improving the performance of essential urban services, the Metro Trading Services Programme will enhance infrastructure delivery while supporting South Africa’s climate and development objectives,” AIIB’s Director General, Public Sector Clients Department, Rajat Misra said in a statement on Friday.
The programme seeks to reduce non-revenue water and electricity losses, strengthen institutional capacity, and enhance climate resilience.
The loan marks AIIB’s first investment in South Africa, establishing a new partnership to advance sustainable infrastructure priorities.
According to National Treasury, by 2031 the programme is expected to reduce non-revenue water from 41 percent to 28 percent and cut electricity losses from 22 percent to 12 percent, while ensuring all eight metropolitan municipalities meet minimum performance standards.
“The AIIB financing strengthens the Government’s broader package of support to improve the governance, financial management and operational performance of trading services in metropolitan municipalities,” National Treasury Director General Duncan Pieterse said.
JN/APA