The World Bank has approved a US$1.5 billion loan (approximately R26.5 billion) to support structural reforms aimed at improving South Africa’s infrastructure.
According to a statement from the Washington-based lender, the funding will address the country’s ongoing challenges of sluggish economic growth and high unemployment by tackling bottlenecks in the energy and freight transport sectors.
Bloomberg reports that South Africa has committed to modernising its state-owned enterprises and introducing greater competition in key industries to revitalise its stagnant economy.
The bank’s programme seeks to enhance energy security, increase the efficiency of freight transport and support the transition to a low-carbon economy.
Finance minister Enoch Godongwana highlighted the importance of the partnership, indicating that the ongoing collaboration with the World Bank will help accelerate crucial reforms necessary to transform the country’s infrastructure landscape.
The loan will provide financial assistance to the state-owned power utility to strengthen Eskom’s grid for renewable energy integration.
It will also unlock liquidity for the other crucial parastatal, national port and rail operator Transnet, to improve logistics.
