The Asian Infrastructure Investment Bank (AIIB) and South Africa have signed a USD 500 million sovereign-backed loan to support improvements in the provision of water and sanitation, electricity, and solid waste services in South Africa’s eight metropolitan cities.
South Africa’s metropolitan municipalities are home to approximately 22 million people and generate around 85% of the country’s economic output, yet face mounting challenges from aging infrastructure, rapid urbanization and increasing climate risks.
The loan will support the Metro Trading Services Program to address these pressures by helping reduce non-revenue water and electricity losses, improve solid waste management and strengthen institutional capacity, contributing to more reliable service delivery and greater climate resilience.
The Program will help improve the financial sustainability, accountability and operational performance of municipal services, including water supply and sanitation, electricity and solid waste management services, while supporting South Africa’s transition to low-carbon, climate-resilient urban development.
“By strengthening municipal governance and improving the performance of essential urban services, the Metro Trading Services Program will enhance infrastructure delivery while supporting South Africa's climate and development objectives,” AIIB's Director General, Public Sector Clients Department, Rajat Misra said in a statement on Friday.
The financing marks AIIB’s first investment in South Africa, establishing a new partnership to advance the country’s sustainable infrastructure priorities.
According to National Treasury, by 2031, the Program is expected to enable all eight participating metropolitan municipalities to meet the program’s minimum performance conditions, reduce non-revenue water from 41% to 28% and lower electricity losses from 22% to 12%, delivering more efficient, reliable and sustainable municipal services.
“The AIIB financing strengthens the Government’s broader package of support to improve the governance, financial management and operational performance of trading services in metropolitan municipalities,” National Treasury Director-General Duncan Pieterse said.
The Asian Infrastructure Investment Bank is a multilateral development bank dedicated to financing “Infrastructure for Tomorrow,” with sustainability at its core. -SAnews.gov.za
