South Africa has secured a $1.5 billion loan from the World Bank to support reforms in critical infrastructure sectors and help stimulate economic growth and job creation, the National Treasury announced on Tuesday.
The Development Policy Loan will focus on addressing bottlenecks in water and sanitation services, freight transport and electricity supply, three areas widely seen as major constraints on South Africa’s economy.
The Treasury said the financing was secured at a favourable interest rate and includes flexible repayment conditions intended to limit the impact of rising debt-servicing costs.
The loan has a 15-year maturity period, including a three-year grace period. Its interest rate is set at the six-month Secured Overnight Financing Rate, known as SOFR, plus 1.35%.
Combined with funding secured from other multilateral institutions, the World Bank loan has allowed the government to meet its $3.2 billion foreign-currency borrowing requirement for the 2026/27 financial year.
The World Bank said the financing represents the fourth stand-alone Development Policy Loan provided to South Africa since 2022.
However, it is the first loan in the series specifically designed to support reforms and improvements in the country’s water and sanitation sector.