South Africa
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South Africa signs $1.5bn World Bank loan to improve energy, transport, and support economic growth with job creation focus.
South Africa signs $1.5bn World Bank loan to improve energy, transport, and support economic growth with job creation focus.
2025-06-27
South Africa has signed a $1.5 billion loan agreement with the World Bank to support major reforms needed to boost its struggling economy. The deal was announced by the National Treasury on 23 June 2025.
What is this loan for?
The money will be used to:
Improve energy security
Upgrade freight transport services
Support the shift towards a low-carbon economy
These reforms aim to fix long-standing infrastructure problems in energy and transport, which are seen as barriers to economic growth and job creation.
Why is this important?
South Africa continues to face low economic growth and high unemployment. By unlocking infrastructure bottlenecks, the government hopes to attract private investment, strengthen public institutions, and deliver better services across key sectors.
This partnership marks a significant step towards addressing South Africa’s pressing economic challenges,” said the National Treasury in its statement.
Loan Details
Amount: $1.5 billion
Maturity: 16 years
Grace Period: 3 years
Interest Rate: 6-month SOFR + 1.49%
The Treasury explained that these favourable terms fit into South Africa’s financing strategy to keep debt service costs manageable.
Looking ahead
The government thanked the World Bank for its continued support in helping South Africa achieve its development goals. This agreement reinforces a strong partnership aimed at building a resilient, sustainable, and inclusive economy.
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