Pretoria: Government and the New Development Bank (NDB) have signed a $1 billion loan agreement to upgrade infrastructure for the Metropolitan Municipal Services as part of the Metro Trading Services Reform Programme (MTSR).
According to South African Government News Agency, the MTSR is a South African government-led reform programme aimed at improving the governance, financial sustainability, and operational performance of municipal trading services in metropolitan municipalities, particularly in water and sanitation, electricity and energy, and solid waste management.
The financing supports a government-led, performance-based reform programme implemented through South Africa's existing legal, fiscal, and institutional framework. This is a performance-based loan with financing linked to institutional strengthening and the achievement of independently verified measurable performance targets, which are approved by metro Councils for their trading services, as stated in the National Treasury statement.
Treasury explained that the NDB's financing forms part of the government's broader efforts to reform municipal trading services in metropolitan municipalities. The loan offers favourable concessional financial terms including a nominal value of $1 billion, a maturity of 16 years, a grace period of 3 years, and an interest rate of Daily SOFR plus 1.18508%.
The NDB loan was prepared in coordination with development partners active in South Africa's infrastructure sector. National Treasury extends its appreciation to the NDB for its support to this government-led reform towards better services for residents and stronger, more sustainable cities, the statement concluded.
The NDB is a multilateral development bank established by Brazil, Russia, India, China, and South Africa (BRICS) with the purpose of mobilising resources for infrastructure and sustainable development projects in emerging markets and developing countries (EMDCs).