CAPE TOWN, July 21– South Africa has secured a loan of 1.5 billion U.S. dollars from the World Bank to support infrastructure reforms aimed at boosting economic growth and creating jobs, the National Treasury said on Tuesday.
The Development Policy Loan is aimed at supporting the country’s efforts to achieve inclusive growth by tackling infrastructure constraints, which it identified as the primary barrier to job creation, the National Treasury said in a statement.
“The loan will help South Africa implement necessary interventions and reforms aimed at advancing reforms in the electricity, freight and logistics sectors, and addressing pressing challenges in the water and sanitation sector,” said the statement.
The loan is anchored on three key areas of structural reform: strengthening energy competitiveness and security, upgrading freight transport services, and delivering efficient water and sanitation services.
The National Treasury noted that the financing terms are consistent with its borrowing strategy aimed at ensuring long-term debt sustainability and affordability by raising funding at the lowest cost.
The loan has a nominal value of 1.5 billion dollars, a maturity of 15 years with a three-year grace period, and an interest rate of the six-month Secured Overnight Financing Rate plus 1.35 percent, according to the statement.
It said the World Bank financing, together with loans secured from other multilateral development partners, has enabled the government to meet its 2026/2027 foreign currency borrowing requirement of 3.2 billion dollars.
The financing “is critical to staying the course and advancing the implementation of historic, timely and critical reforms and South Africa’s overall development objectives,” the statement said. (Namibia Daily News / Xinhua)
