South Africa signs $1.5bn World Bank loan to boost infrastructure and jobs

Johannesburg – South Africa has signed a US$1.5 billion (about R27 billion) Development Policy Loan with the World Bank to support infrastructure reforms aimed at boosting economic growth and creating jobs.

Announced by the National Treasury on Tuesday, the loan will fund reforms in the electricity, freight and logistics, water, and sanitation sectors, which government says are key to addressing infrastructure bottlenecks that have hampered economic growth, South African Government News Agency reported.

Treasury said the loan forms part of the government’s broader structural reform programme and is expected to strengthen energy security, improve freight transport services and enhance water and sanitation delivery.

The South African government and the World Bank have signed a US$1.5 billion Development Policy Loan aimed at supporting infrastructure reforms and boosting inclusive economic growth. https://t.co/oQKTczW6lZ#GovZAUpdates

— @SAgovnews (@SAgovnews) July 21, 2026

“The loan is valued at US$1.5 billion and has a 15-year maturity, including a three-year grace period. The interest rate is set at the six-month Secured Overnight Financing Rate (SOFR) plus 1.35%,” the report said.

“Treasury said the financing terms are aligned with the National Treasury’s borrowing strategy, which seeks to maintain long-term debt sustainability and affordability by securing funding at the lowest possible cost.”

The World Bank funding, together with loans from other multilateral development partners, enables South Africa to meet its US$3.2 billion foreign currency borrowing requirement for the 2026/27 financial year.

Treasury thanked the World Bank for its continued support, saying the partnership is vital to advancing the country’s infrastructure reforms and broader development goals.