South Africa's National Treasury announced on Tuesday that it had signed a $1 billion, 16-year loan agreement with the New Development Bank to upgrade metropolitan municipal infrastructure under the Metro Trading Services Reform Programme.
The loan carries a nominal value of $1 billion, a 16-year maturity and a three-year grace period, with an interest rate set at daily SOFR plus 1.18508%, under the agreement signed between the two parties.
FACILITY TIED TO PERFORMANCE TARGETS
The loan is structured as a performance-based facility, tied to institutional strengthening and independently verified measurable performance targets under the Metro Trading Services Reform Programme. The programme covers municipal trading services in water and sanitation, electricity and energy, and solid waste management, with performance targets set by metro councils.
The New Development Bank is a multilateral development bank established by Brazil, Russia, India, China and South Africa.
MULTIPLE INSTITUTIONS CO-FINANCE PROGRAMME
Co-financing institutions for the broader Metro Trading Services Reform Programme include the World Bank, the Asian Infrastructure Investment Bank, KfW Development Bank and the French Development Agency.
Treasury said the government-led reform programme aims to improve the governance, financial sustainability and operational performance of municipal trading services in metropolitan areas.