WASHINGTON, July 17 – South Africa has secured $1.5 billion World Bank loan to accelerate reforms in electricity, freight transport, and water infrastructure, with the programme expected to support nearly 600,000 jobs by 2032 as the country seeks to remove long-standing barriers to economic growth.
The financing will support a new phase of infrastructure reforms aimed at increasing private sector participation, improving service delivery and strengthening the management of critical networks that underpin the economy.
The loan, provided through the International Bank for Reconstruction and Development (IBRD), is the fourth stand-alone Development Policy Loan approved for South Africa since 2022. It expands the scope of previous support by adding water and sanitation reforms to ongoing efforts in energy and freight transport.
The operation was prepared in coordination with development partners supporting South Africa’s infrastructure reforms, including Germany, Japan, the OPEC Fund and the African Development Bank.
The World Bank estimates that the reforms will generate most of their employment impact through improvements in electricity and transport. These sectors are projected to support about 280,000 jobs by 2027, rising to more than 560,000 by 2032 as infrastructure improvements stimulate investment and economic activity.
South Africa’s electricity sector remains a central focus of the programme following years of power shortages that disrupted businesses and households. The reforms will support the establishment of a competitive wholesale electricity market and encourage greater private investment in transmission infrastructure.
The programme also targets expanded electricity access, with a goal of connecting 300,000 additional households by December 2027.
The World Bank said earlier reforms in the power sector had already produced measurable results, including the virtual elimination of load shedding for the past 18 months and a sixfold increase in private investment in renewable energy.
Beyond energy, the programme seeks to reshape South Africa’s freight transport system by opening more opportunities for private rail operators and supporting the country’s first port terminal concession in Durban.
The reforms are intended to address inefficiencies in logistics infrastructure that have affected trade competitiveness. Rail and port freight volumes have increased by more than 50 percent since 2023, according to the World Bank.
Water and sanitation will also become part of the reform agenda under the latest financing operation. The programme will strengthen regulatory oversight, allow greater participation by private water service providers and provide more autonomy to the National Water Resources Infrastructure Agency to invest in bulk water infrastructure.
While water reforms are not expected to create large numbers of direct jobs, the World Bank said they would deliver social and economic benefits by reducing the time households spend collecting water, lowering health risks and improving access for poorer communities, particularly female-headed households.
“This programme reflects our government’s determination to remove the infrastructure constraints that have held back growth and job creation for too long,” said Enoch Godongwana, South Africa’s Minister of Finance.
The World Bank said South Africa’s reform experience showed that sustained policy changes could help reverse infrastructure challenges and attract private investment.
“South Africa has shown that sustained reform can turn around even deep-seated infrastructure crises,” said Satu Kahkonen, World Bank Group Division Director for South Africa.
