BRICS bank commits funds for local logistics and water projects. THE National Treasury welcomes funding commitments by the New Development Bank (NDB) to critical freight logistics and water projects. During the 9th Annual Meeting held in Cape Town, the NDB announced the approval of a US$1 billion loan to South Africa for financing water and sanitation infrastructure development under the government’s Municipal Infrastructure Grant (MIG). Additionally, it was announced that a R5 billion loan agreement with Transnet was also extended.
“We welcome the NDB’s funding commitments. They will go a long way in assisting us with the funding challenges faced by some of our programmes and parastatals. Every cent is welcome. Of course, many of our broader plans for infrastructure pipeline development and funding will be unpacked during the Medium-Term Budget Policy Statement in October,” said Minister of Finance and NDB governor, Enoch Godongwana.
The R5 billion loan agreement signed with Transnet aims to enhance the efficiency and capacity of South Africa’s freight rail systems. The improvement and modernization of freight rail sector program includes rail network infrastructure renewal, locomotive overhauls, and wagon fleet renewal. This program is expected to restore freight rail volumes in South Africa, improving operational performance and reliability, and contributing to a sustainable future.
NDB president, H.E. Dilma Rousseff, said, “We are delighted to partner with Transnet in this transformative initiative. This loan underscores NDB’s commitment to supporting sustainable development and economic growth in South Africa. By modernizing the freight rail sector, we aim to facilitate more efficient logistics operations that will benefit the entire region and align with our goal of investing in a sustainable future.”
Transnet group chief executive, Michelle Phillips added, “This investment is important for Transnet, as we accelerate implementation of the Recovery Plan and economic reforms. The modernisation programme will enhance our operational capabilities and contribution to the growth and competitiveness of the economy. We are grateful for NDB’s support and look forward to a successful collaboration.”
Minister Godongwana said they looked to the NDB to provide solutions aimed at de-risking infrastructure projects through its financial instruments to attract private capital. This, he added, would support infrastructure projects and provide technical assistance in designing innovative funding models and institutional arrangements that could accelerate infrastructure investments at a country-level.
“However, if the Bank is to continue advancing the interests of the developing world and addressing challenges such as renewable energy, infrastructure development, digital access and job creation, then the NDB must make a concerted effort to speed-up disbursements of approved projects,” said Godongwana.
The New Development Bank was created in 2015 by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in the BRICS and other emerging market economies and developing countries. In 2021, the NDB began expanding its membership and admitted Bangladesh, Egypt, the United Arab Emirates and Uruguay as its new member countries.
