Cape Town - (Saba):
The South African Treasury announced on Wednesday the signing of a $1.5 billion loan agreement with the World Bank to upgrade its transport and energy infrastructure, in an effort to revive its struggling economy.
For more than a decade, Africa's largest economy has been facing worsening crises, including recurring power outages that have hampered productivity, deteriorating rail networks, and chronically congested ports, negatively impacting vital sectors such as mining and the automotive industry.
Through this financing, the government aims to alleviate transport congestion and enhance energy security, without specifying the projects for which the funding will be allocated, according to Al Jazeera Net.
The loan offers favorable terms compared to commercial financing, as it includes a three-year grace period, which will help limit rising debt service costs.
This loan comes separately from another $500 million financing being considered by the World Bank Group to support private sector investment in the electricity transmission network, which requires expansion to accommodate renewable energy projects.
South African Finance Minister Enoch Godongwana unveiled in his budget last month an investment plan exceeding R1 trillion (approximately $55.5 billion), covering the transport, energy, water, and sanitation sectors, as part of the government's efforts to stimulate growth and improve public services.
The Treasury aims to see public debt peak at 77.4% of GDP during the current fiscal year, with a gradual decline thereafter.
| more of (International) |