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The South African government said it expects the World Bank loan will enable inclusive economic growth and job creation by assisting in the removal of important infrastructure bottlenecks, especially in the energy and freight transportation sectors.
The World Bank granted South Africa a USD 1.5 billion loan to upgrade transportation infrastructure and help it transition toward a low-carbon economy, the country’s National Treasury, said Monday.
Deteriorating rail systems, congested ports, and frequent power outages have hindered vital industries such as mining and automotive manufacturing in South Africa, contributing to slow economic growth over the last decade in Africa’s most developed economy.
South African President Cyril Ramaphosa and his coalition government have pledged to tackle corruption and decades of poor management, as well as pursue reforms to help the country emerge from its economic rut and alleviate its extremely high unemployment rate.
While it did not give specifics, the South African government said it expects the World Bank loan will enable inclusive economic growth and job creation by assisting in the removal of important infrastructure bottlenecks, especially in the energy and freight transportation sectors.
Additionally, because the financing has better conditions than conventional borrowing, such as a three-year grace period, it should reduce escalating debt-service expenses, it added. South Africa’s 2025-26 budget has allocated over R1 trillion over the next three years toward critical transportation, energy, water, and sanitation infrastructure while improving access to basic services.
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However, real gross domestic product was revised downward to 1.4% in 2025 from 1.9% previously projected by the Finance Ministry in March because of the worsening global outlook and the persistence of logistics constraints and higher borrowing costs.
