The Board of Directors of the New Development Bank (NDB) has approved a loan of R17.8 billion ($1 billion) to South Africa for the financing of water and sanitation infrastructure development projects.
This announcement was made at the 9th Annual Meeting of the NDB held in Cape Town over the weekend.
The loan will fall under South Africa’s Municipal Infrastructure Grant (MIG) and is a conditional grant allocated to municipalities to reduce infrastructure backlogs and ensure the provision of basic services to poor households.
It is envisioned that the funds will help address the major infrastructure improvements needed in the water and sanitation sector of South Africa.
National Treasury welcomed the funding by the NDB and said it was critical to help assist freight logistics and water projects.
“We welcome the NDB's funding commitments. They will go a long way in assisting us with the funding challenges faced by some of our programmes and parastatals.
“Every cent is welcome. Of course, many of our broader plans for infrastructure pipeline development and funding will be unpacked during the Medium-Term Budget Policy Statement in October,” Minister of Finance Enoch Godongwana said.
Godongwana further added that South Africa looked to the NDB to provide solutions aimed at de-risking infrastructure projects through its financial instruments to attract private capital.
This would support infrastructure projects and provide technical assistance in designing innovative funding models and institutional arrangements that could accelerate infrastructure investments at a country-level, he added.
“However, if the bank is to continue advancing the interests of the developing world and addressing challenges such as renewable energy, infrastructure development, digital access, and job creation then the NDB must make a concerted effort to speed-up disbursements of approved projects,” Godongwana said.
Transnet gets R5 billion
The NDB also noted on Friday that it would provide a R5 billion loan agreement with Transnet.
According to a statement by the freight transport and logistics company, this investment would help support the modernisation and improvement of South Africa’s freight rail sector.
The loan agreement was signed at the meeting by NDB President, Dilma Rousseff and Transnet Group Chief Executive, Michelle Phillips.
“We are delighted to partner with Transnet in this transformative initiative,” Rousseff said
“This loan underscores NDB’s commitment to supporting sustainable development and economic growth in South Africa. By modernising the freight rail sector, we aim to facilitate more efficient logistics operations that will benefit the entire region and align with our goal of investing in a sustainable future,” she said.
Phillips said that the R5 billion was a vital investment for Transnet.
“This investment is important for Transnet, as we accelerate the implementation of the Recovery Plan and economic reforms. The modernisation programme will enhance our operational capabilities and contribute to the growth and competitiveness of the economy,” she said.
IOL BUSINESS