A US$1 billion loan is set to support infrastructure upgrades and reform in South Africa’s metropolitan areas.
The financing from the New Development Bank, established by the BRICS bloc, will be deployed through South Africa’s Metro Trading Services Reform (MTSR) programme, reports Africa Business Communities.
The MTSR programme is a government-led initiative to strengthen the governance, financial sustainability and operational performance of municipal services in South Africa’s eight metropolitan areas.
According to TVBRICS, the repayment term for the loan is 16 years with a three-year grace period.
The MTSR programme is also being supported by the World Bank, the Asian Infrastructure Bank, KfW Development Bank and the French Development Agency.
South Africa’s National Treasury established the MTSR programme in 2025 to deliver performance-based grants as an incentive to the eight metropolitan municipalities to improve municipal services, including the provision of electricity and water and the management of wastewater and solid waste.
The grant payments will depend on municipalities’ maintaining an effective accountability framework and be linked to the extent municipalities achieve their performance targets.
Treasury has set aside R54 billion over six years, which it says could unlock R108 billion in infrastructure investment if managed properly.
South Africa’s eight metropolitan areas – Buffalo City, City of Cape Town, City of Johannesburg, Ekurhuleni, eThekwini, Mangaung, Nelson Mandela Bay and Tshwane – are home to about 40% of South Africa’s population.
