SA Secures $1.5 Billion World Bank Loan for Infrastructure Reforms

National Treasury also thanked the World Bank for its continued partnership, saying the collaboration remains important for advancing structural reforms and supporting the country's long-term development goals.

South Africa has secured a US$1.5 billion Development Policy Loan from the World Bank to accelerate key infrastructure reforms and support stronger economic growth. The funding is expected to help tackle long-standing challenges in electricity, freight transport, logistics, water and sanitation, sectors that the government says are central to improving service delivery, creating jobs and strengthening the economy.

The agreement, announced by the National Treasury, comes as South Africa continues to address slow economic growth and persistently high unemployment through structural reforms designed to remove obstacles to investment and productivity.

Funding targets major infrastructure bottlenecks

According to the National Treasury, the loan will support reforms aimed at improving the reliability of electricity supply, modernising freight and logistics services and strengthening water and sanitation infrastructure.

These areas have been identified as major barriers to economic expansion, with unreliable infrastructure affecting businesses, investment and public services. Treasury said improving these sectors is expected to create a stronger foundation for inclusive growth while expanding employment opportunities.

The financing represents the fourth Development Policy Loan under South Africa's partnership with the World Bank and focuses on strengthening energy security, upgrading freight transport systems and improving access to reliable water and sanitation services.

Loan structured to support long-term fiscal stability

The World Bank financing carries a 15-year repayment period, including a three-year grace period, with an interest rate linked to the six-month Secured Overnight Financing Rate (SOFR) plus 1.35%.

National Treasury said the borrowing terms are consistent with the government's debt management strategy, which seeks to secure financing at competitive rates while maintaining long-term fiscal sustainability. The favourable repayment conditions are also expected to limit additional debt-servicing costs.

Foreign borrowing target for the year achieved

Treasury said the World Bank loan, together with financing secured from other multilateral development partners, has enabled the government to meet its US$3.2 billion foreign currency borrowing requirement for the 2026/27 financial year. Officials described the financing as an important contribution to South Africa's ongoing reform programme, helping government continue investment in critical infrastructure while supporting broader economic recovery efforts.

National Treasury also thanked the World Bank for its continued partnership, saying the collaboration remains important for advancing structural reforms and supporting the country's long-term development goals.