South Africa Secures $1.5 Billion World Bank Loan

South Africa has secured a $1.5 billion loan from the World Bank to support reforms targeted at improving infrastructure, boosting economic growth and creating jobs.

The country’s National Treasury announced the deal on Tuesday, saying the Development Policy Loan will focus on key sectors including water and sanitation, freight transport and electricity.

The Treasury said the loan comes with a favourable interest rate and flexible repayment terms, helping to reduce pressure from rising debt service costs.

South African Flag. Credit: Channels TV.

According to the statement, the loan has a 15-year repayment period, including a three-year grace period, and carries an interest rate of six-month SOFR (Secured Overnight Financing Rate) plus 1.35%.

The financing, combined with support from other multilateral lenders, has helped South Africa meet its 2026/27 foreign currency borrowing target of $3.2 billion.

The World Bank said the funding is the fourth stand-alone Development Policy Loan provided to South Africa since 2022.

It added that the latest loan is the first in the series to support improvements in the country’s water and sanitation sectors.

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