South Africa has secured a significant infrastructure funding boost after the New Development Bank (NDB), commonly known as the Brics Bank, approved a $1 billion (R16.2 billion) loan to support upgrades across the country’s eight metropolitan municipalities.
The funding was approved during a board meeting at the NDB headquarters in Shanghai and forms part of South Africa’s broader efforts to address aging infrastructure, improve service delivery and stimulate economic growth.
The programme will focus on strengthening critical municipal services, including water supply, sanitation, electricity distribution and solid waste management. The targeted metros are Buffalo City, Cape Town, Ekurhuleni, eThekwini, Johannesburg, Mangaung, Nelson Mandela Bay and Tshwane.
Together, these metropolitan areas are home to approximately 22 million people and generate more than two-thirds of South Africa’s economic output.
Major investment aimed at improving urban services
According to the NDB, the project is expected to improve living standards for residents while creating a more attractive environment for businesses and investors.
Reliable access to water, electricity and waste management services has become increasingly important as municipalities struggle with aging infrastructure, population growth and rising service delivery demands.
The funding aligns with South Africa’s National Development Plan 2030, which identifies infrastructure development as a key driver of economic growth and social progress.
The latest loan comes as National Treasury pushes ahead with reforms designed to strengthen municipal finances and improve infrastructure spending. Earlier this year, Treasury launched metro trading services reforms backed by R54 billion in performance-based grants.
The initiative aims to encourage municipalities to ring-fence revenue for infrastructure projects and unlock an estimated R100 billion in additional investment over time.
Brics bank expands role in South Africa’s development agenda
The new metro infrastructure loan is part of a broader series of investments approved by the NDB in South Africa over the past several months.
Since December 2025, the bank has approved approximately R44.2 billion in funding for projects spanning transport, healthcare, water security and economic development.
Among the largest initiatives is a separate $1 billion loan approved in March for the Passenger Rail Agency of South Africa (PRASA). The project aims to modernise high-demand urban rail corridors, improve reliability and safety, and increase passenger capacity.
The NDB also approved $200 million for the construction of the new Limpopo Academic Hospital in Polokwane. The facility will include 488 hospital beds and a dedicated academic training centre for future healthcare professionals.
Additional funding has been directed toward water infrastructure projects, including the Magalies Bulk Water Supply Scheme and the Olifants Management Model Programme, both aimed at improving long-term water security for communities and industries.
At the same time, the Development Bank of Southern Africa (DBSA) is working on plans to expand municipal waste management infrastructure in several municipalities. The institution is preparing funding proposals for submission to the Green Climate Fund, with the goal of improving recycling systems, reducing landfill dependence and strengthening local government waste management capabilities.
South Africa continues to face a substantial infrastructure funding challenge. Infrastructure investment has declined from approximately 30% of GDP in the early 1980s to around 15% in recent years. Analysts estimate the country’s infrastructure gap at between $254 billion and $329 billion.
Against this backdrop, development finance institutions such as the NDB are playing an increasingly important role in supporting projects aimed at modernising essential services and strengthening long-term economic growth.
Source: Business Day