SA govt signs $1.5bn loan with World Bank for infrastructure development

CAPE TOWN - Government has signed a $1.5 billion loan with the World Bank to spur on infrastructure development.
 
The National Treasury said the loan agreement was aimed at supporting critical structural reforms that will enhance the efficiency, resilience and sustainability of the country’s infrastructure services.
 
This includes improving energy security, the freight transport services and the transition to a low-carbon economy.
 
The National Treasury said this latest partnership with the World Bank marked a significant step towards addressing South Africa’s low growth and unemployment.
 
It said the loan would help to unlock key infrastructure bottlenecks, particularly in the energy and freight transport sectors.
 
The Treasury said the financing formed part of government's broader efforts to implement structural reforms that strengthened public institutions, included private investment and improved service delivery across priority sectors of the economy.
 
The loan will mature in 16 years, with a three-year grace period.
 
It will be charged at the standard overnight financing rate plus 1.49%.
 
The Treasury said these terms were in line with its financing strategy, important to government’s financial stability and of minimising an increase in debt service costs.