World Bank supports South Africa’s infrastructure development with a $350 million funding initiative

The World Bank has committed to providing South Africa with $350 million in financing for a new credit guarantee facility designed to facilitate private investment in infrastructure, including the expansion of the power transmission grid.

The World Bank announced in a statement on March 5 that the funding would be sourced from the International Bank for Reconstruction and Development, which is part of the World Bank Group.

The Credit Guarantee Vehicle seeks to mobilize approximately $10 billion in capital, drawing from private investors, commercial lenders, and institutional investors, over a span of 10 years.

Last year, Reuters reported that the World Bank Group was contemplating the provision of funding for the facility.

South African Finance Minister Enoch Godongwana was quoted in the World Bank statement as saying the vehicle would “support massive investments in transmission infrastructure” and that it would be incorporated as a company in the coming months.

South Africa is seeking private investment for a plan to expand its power infrastructure by adding thousands of kilometers of new power lines and improving transformer capacity, aiming to recover from over a decade of severe power cuts.

The World Bank stated that the initiative would bolster the government’s economic reform agenda.