Brics bank approves over R20 billion in loans for South African infrastructure projects

The New Development Bank (NDB) has earmarked over R20 billion for South Africa’s rail network and water infrastructure.

The funds include a R5 billion loan to Transnet and a R17 billion loan to the government for water and sanitation projects.

The bank was launched in 2015 by the five Brics nations—Brazil, Russia, India, China, and South Africa—with the purpose of funding such projects.

R5 billion loan to Transnet

The announcement came in the wake of the 9^th annual meeting of the NBD held Cape Town from August 29 to 31.

The loan to Transnet is set to fund a modernisation of the freight rail sector to restore freight volumes while improving operational performance and reliability.

“By modernising the freight rail sector, we aim to facilitate more efficient logistics operations that will benefit the entire region and align with our goal of investing in a sustainable future,” stated NDB president and former president of Brazil Dilma Rousseff.

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Transnet are in the early phases of their recovery plan, and CEO Michelle Phillips stated the loan will be crucial in cementing the entity’s economic reforms.

“The modernisation programme will enhance our operational capabilities and contribution to the growth and competitiveness of the economy,” said Phillips.

Over R17 billion for water and sanitation

The NDB will loan South Africa an additional 1 billion US dollars that is to be used for the development of water and sanitation infrastructure.

The funds will be channelled through the Municipal Infrastructure Grant (MIG), a fund set up in the early 2000s to streamline targeted municipal infrastructure spending.

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The loan was first touted in July 2023 as part of South Africa’s Municipal Water Supply and Sanitation Programme and National Water and Sanitation Master Plan 2030

“The programme will play a crucial role in addressing the pressing need for infrastructure improvements in the water and sanitation sector of South Africa, supporting MIG implementation,” stated the NDB.

Deputy President Paul Mashatile addressed the foreign dignitaries in closing out the 9th annual meeting.

“The Transnet project in particular is of utmost importance in guaranteeing a goods system that is internationally competitive, allowing for the continuous expansion and diversification of the country’s economy,” stated the Deputy President.