The Asian Infrastructure Investment Bank (AIIB) has made its first-ever investment in South Africa, approving a $500 million loan to support municipal infrastructure, climate resilience and improved service delivery.
The funding will be channelled through the South Africa Metro Trading Services Programme, which aims to strengthen the financial sustainability and operational performance of municipalities responsible for water and sanitation, electricity and solid waste management.
The programme is being co-financed with the World Bank as part of a broader $3 billion initiative led by the South African government to modernise municipal infrastructure and improve local government performance.
According to the National Treasury, the loan will support reforms to strengthen municipal governance, improve financial management and boost operational efficiency, while encouraging climate-smart investment across the country’s metropolitan municipalities.
By 2031, the programme aims to reduce non-revenue water losses from 41% to 28% and cut electricity losses from 22% to 12%, improving both municipal finances and service delivery.
The agreement marks a significant milestone for South Africa, with the AIIB’s inaugural investment signalling growing international confidence in the country’s infrastructure and climate transition agenda.
Government said the funding forms part of broader efforts to build more resilient, sustainable and financially viable cities capable of supporting long-term economic growth.