AfDB Approves ZAR 2.5B Loan to City of Johannesburg for Vital Urban Infrastructure
The African Development Bank Group (AfDB) has approved a landmark ZAR 2.5 billion (approximately $139 million) corporate loan to the City of Johannesburg Metropolitan Municipality, marking the Bank’s first direct lending to a subnational entity in Africa.
This historic financing will support over 100 critical infrastructure projects across electricity, water, sanitation, and waste management sectors, benefiting more than 6 million residents in South Africa’s largest economic hub. The loan focuses exclusively on revenue-generating infrastructure to ensure sustainable debt repayment while addressing urgent service delivery challenges.
Projects include upgrading electricity distribution networks, installing smart meters, expanding renewable energy capacity, rehabilitating aging water pipelines, reducing water losses from 46% to 37%, and improving landfill compliance and waste collection services. The initiative aims to connect 3,200 new households to the electricity grid.
African Development Bank Vice President for Private Sector, Infrastructure & Industrialization, Solomon Quaynor, hailed the deal as “a new era in empowering cities,” highlighting its potential as a scalable model for subnational lending across Africa.
Director General for Southern Africa, Kennedy Mbekeani, emphasized Johannesburg’s strategic economic role, contributing 16% to South Africa’s GDP and acting as a gateway for continental investment.
The project will address Johannesburg’s significant infrastructure challenges, including annual electricity losses of 30% over recent years and high water losses. Construction is expected to create 2,869 jobs, with 14% reserved for women and 23% for youth, along with 592 full-time equivalent positions. Additionally, 40% of ZAR 500 million contracts will target women-owned businesses and 50% youth entrepreneurs.
Beyond infrastructure upgrades, the project aims to reduce electricity and water interruptions—boosting industrial productivity—and enhance free basic services for 160,000 indigent households.
The African Development Bank is also seeking a $1.5 million grant from its Urban and Municipal Development Fund to support governance reforms and climate-resilient planning.
Comprehensive safeguards will ensure transparent monitoring, compliance, and sound financial management throughout the loan’s lifecycle, underlining the Bank’s commitment to sustainable, inclusive urban development.
