The Government has secured a €300 million concessional loan, equivalent to R5.6 billion, to support National Treasury’s Metro Trading Services Reform (MTSR) programme, which will help metropolitan municipalities improve service delivery and upgrade ageing infrastructure.
The MTSR is designed to support the turnaround of the three essential trading services – electricity, water supply and sanitation, and solid waste management – in South Africa’s eight metropolitan municipalities, which collectively serve over 22 million residents.
In a statement on Wednesday, Minister of Finance Enoch Godongwana welcomed the concessional financing from the German and French Development Cooperation – via KfW Development Bank (KfW) and Agence Française de Développement (AFD).
“The €300 million in concessional financing from KfW Development Bank and Agence Française de Développement strengthens the Government’s broader programme of support to improve the governance, financial sustainability and operational performance of essential trading services in metropolitan municipalities.
“We welcome the continued partnership of Germany and France in supporting more reliable services, increased infrastructure investment and stronger, more sustainable cities,” Godongwana said.
The programme seeks to improve the financial and operational performance of those trading services. It will ensure that revenues generated are reinvested into much-needed infrastructure to reduce outages and investment backlogs.
The programme also recognises that metropolitan municipalities and their financial sustainability are key to achieving economic growth for South Africa via improved service delivery.
“These new loans – €200 million from KfW and €100 million from AFD -fall under France and Germany’s Just Energy Transition mandate, as the MSTR will contribute to the implementation of the municipal component of the JET-Investment Plan (JET-IP).
“Improving the performance of essential municipal services is a fundamental prerequisite for delivering the JET and will help accelerate the public and private investments needed to address infrastructure backlogs and modernise electricity distribution networks,” a statement jointly issued by the National Treasury, KFW and AfD explained.
As for AFD, this support to MTSR is part of its long-standing partnership with South African municipalities, built through numerous direct loans, notably to Johannesburg, eThekwini and Cape Town.
These loans have been aimed at financing municipal infrastructure programmes while supporting policies to reduce inequalities and strengthen resilience to climate change.
KfW’s Country Director for South Africa, Cornelia Tittmann, recognised National Treasury’s leadership in developing a programme that will improve service delivery and living conditions for millions of South Africans.
“As a key partner on the continent, South Africa’s success matters deeply to Europe, and this commitment is reflected in continued cooperation across trade, investment, and development initiatives such as the MTSR,” Tittmann said.
AFD’s Regional Director for Southern Africa, Marie-Hélène Loison, commended the National Treasury for leading this impactful programme, bringing together eight municipalities and national departments around a shared reform agenda.
“The MTSR programme will contribute to ensuring that the necessary investments in essential urban services are protected and sustained over time and will bring tangible improvements in service delivery for residents and businesses,” Loison said. –SAnews.gov.za
Source: Original report at SAnews.gov.za.
