JOHANNESBURG, Aug. 7 (Xinhua) -- South Africa and the Asian Infrastructure Investment Bank (AIIB) have signed a 500-million-U.S.-dollar sovereign-backed loan agreement to improve urban services.
In a joint statement issued on Friday, South Africa's National Treasury and the AIIB said the financing, which marks AIIB's first investment in South Africa, will support the South Africa Metro Trading Services Program.
The program aims to improve the financial sustainability, accountability and operational performance of municipal services, including water supply and sanitation, electricity and solid waste management, while supporting South Africa's transition to low-carbon, climate-resilient urban development.
Co-financed with the World Bank, the program forms part of a broader 3-billion-dollar initiative led by the South African government. It will support reforms to strengthen governance, operational efficiency and financial management, while encouraging climate-smart investment in essential urban services.
South Africa's metropolitan municipalities are home to about 22 million people and generate around 85 percent of the country's economic output, but face mounting challenges from aging infrastructure, rapid urbanization and increasing climate risks, according to the statement.
"The AIIB financing strengthens the government's broader package of support to improve the governance, financial management and operational performance of trading services in metropolitan municipalities," said Duncan Pieterse, director-general of the National Treasury.
Rajat Misra, AIIB's director-general of the Public Sector Clients Department for Region 1, said the investment marks the beginning of AIIB's partnership with South Africa and reflects a shared commitment to building more resilient, sustainable and well-managed cities.
By 2031, the program is expected to enable all eight participating metropolitan municipalities to meet its minimum performance conditions, reduce non-revenue water from 41 percent to 28 percent and lower electricity losses from 22 percent to 12 percent. ■