The World Bank Group has approved $1.5 billion in financing to support South Africa’s efforts to modernise electricity, freight transport, water and sanitation infrastructure while accelerating economic growth and job creation.
According to World Bank economic modelling, the reforms supported by the loan could help generate nearly 600,000 direct and indirect jobs by 2032.
The financing is being provided through the International Bank for Reconstruction and Development. It is the fourth stand-alone Development Policy Loan approved for South Africa since 2022 and the first in the series to include water and sanitation reforms alongside electricity and freight transport.
South Africa has already recorded progress in addressing major infrastructure challenges. Load shedding has been largely avoided for approximately 18 months, private investment in renewable energy has increased sixfold, and rail and port freight volumes have risen by more than 50 per cent since 2023.
In the electricity sector, the programme will support the establishment of a competitive wholesale power market and greater private investment in transmission infrastructure. It also targets 300,000 new household electricity connections by December 2027.
Freight transport reforms will promote competition among private railway operators and support South Africa’s first port terminal concession in Durban. These measures are expected to improve the efficiency of railways and ports, reduce transportation costs and make businesses more competitive.
Water and sanitation reforms will strengthen regulatory oversight, enable greater participation by private service providers and give the newly established National Water Resources Infrastructure Agency more independence to invest in major water infrastructure.
Most of the projected jobs will result from reforms in electricity and transport. Together, these sectors are expected to support approximately 280,000 jobs by 2027, increasing to more than 560,000 by 2032.
Although water and sanitation reforms are not expected to create as many direct jobs, they could improve daily life for millions of households. Expected benefits include better access to safe water, reduced health risks and less time spent collecting water, particularly for low-income and female-headed households.
South African Finance Minister Enoch Godongwana said the programme would help remove infrastructure constraints that have limited economic growth and employment. He highlighted the importance of expanding reforms into the water sector, where governance and investment gaps continue to affect vulnerable communities.
The operation was prepared in collaboration with development partners, including Germany, Japan, the OPEC Fund and the African Development Bank.
The financing is expected to attract additional private investment, lower operating costs for businesses and improve essential public services. Together, these reforms could strengthen South Africa’s infrastructure, support inclusive growth and create employment opportunities across the economy.
