Treasury signs another loan to fix City of Joburg and others
Finance minister says there is a three-year plan to fix the metro.
The South African Treasury has signed a $1 billion loan agreement with the New Development Bank to upgrade infrastructure in the country's eight metropolitan municipalities, including Johannesburg. This is the second loan for the same Metro Trading Services Reform Programme, which aims to improve governance, financial sustainability, and operational performance of municipal trading services in these municipalities.
Finance Minister Enoch Gogodongwana announced a three-year plan to fix Johannesburg at the DBSA's financial results announcement, with the loan to be repaid over 16 years, including a three-year grace period. The interest rate is linked to the Secured Overnight Financing Rate plus 1.18508%. The National Treasury confirmed that the loan will be performance-based, with financing contingent on institutional strengthening and meeting measurable targets approved by metro Councils.
The NDB is financing the program alongside the World Bank, Asian Infrastructure Investment Bank, KFW Development Bank, and French Development Agency. Gogodongwana stated that the National Treasury will support Johannesburg, regardless of the election outcome, for three years. The five key areas for support remain undisclosed but are expected to align with the MSTR programme's focus on governance, financial sustainability, operational performance, water and sanitation, electricity and energy, and solid waste management.
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