The African Development Bank (AfDB) has approved a $474.6 million loan for South Africa to strengthen its power and transport sectors, aiming to improve energy efficiency and rail reforms.
This follows weeks after South Africa secured a $1.5 billion loan from the World Bank for similar projects.
This was disclosed in a statement issued by AfDB on Tuesday.
The bank noted that its financing is part of a wider international support package to help Africa’s most industrialized economy address long standing infrastructure challenges.
AfDB stated that apart from its own contribution, South Africa would also receive 500 million euros (about $590.75 million) from German development bank KFW.
It would also get up to $200 million from the Japan International Cooperation Agency (JICA) and $150 million from the OPEC Fund for International Development.
Decade long infrastructure crisis
For over ten years, South Africa has struggled to sustain economic growth due to chronic power shortages, dilapidated railway systems and heavily congested ports.
These challenges have weakened key sectors, including mining and auto making, which rely on consistent power supply and efficient logistics.
In its statement, AfDB mentioned that the new loan would support government reforms aimed at modernizing energy infrastructure, cutting power losses and boosting rail network reliability.
The bank added that such measures are expected to unlock economic opportunities and reduce constraints faced by businesses.
“The AfDB financing is designed to complement other international contributions, ensuring a coordinated effort towards critical reforms in South Africa’s energy and transport sectors,” the bank noted.
Broader international support
Beyond AfDB’s funding, the World Bank’s $1.5 billion loan secured last month targets similar infrastructure upgrades, reflecting global confidence in South Africa’s reform plans.
Meanwhile, officials suggest that these loans are structured to prioritize sustainable projects that can deliver long term benefits to South Africa’s economy.
The combined international support is expected to address systemic weaknesses that have contributed to frequent power cuts and logistical bottlenecks.
The the AfDB loan, together with other external funding, aims to help South Africa overcome years of under investment in critical infrastructure, restore investor confidence and lay the groundwork for steady economic growth.
