Cape Town secures R2 billion loan to boost infrastructure
The City of Cape Town has secured an R2 billion loan from AFD, a French development bank, with plans to upgrade its infrastructure.
The loan contributes to the record infrastructure investment budget of R43 billion over the medium term.
According to the city, it has partnered with AFD to acquire a more favourable rate when tested against the market.
“The €100 million from AFD, the French development bank – amounting to just over R2 billion on the date of issuing – is a developmental loan at a more favourable rate when tested against the market,” said the City.
The metro plans to use the finances acquired to fund several categories of infrastructure, including water, sanitation (29%), urban mobility (24%) and access to electricity (17%).
“Cape Town has an ambitious infrastructure investment portfolio of R120 billion over the next 10 years,” said the city’s mayor Geordin Hill-Lewis.
“To achieve this, we must lay the foundation now in the form of water and energy security, better sanitation, a cleaner environment for all, greater urban mobility, and climate change resilience,” said Hill-Lewis.
“Our aim is to position the city for job–creating economic growth and sustainability as we build towards our long-term vision of a city of hope for all.”
Since 1994, AFD has been actively involved in South Africa and has established a strong partnership with the City. In 2013, AFD provided its initial loan to the metro.
Speaking to ENCA, Hill-Lewis said that Cape Town has successfully shown international investors that it can pay back loans on time and reach the end of projects without corruption.
He said that it had been a priority of the city to accelerate investment into the metro, focusing particularly on water and sanitation.
The lion’s share of the loan is to be used for water and sanitation; however, the next biggest project to follow is the extension of the MyCity bus to the southeast of the city.
Hill-Lewis said that extending this, under the allocation of ‘urban mobility’, would cost roughly R8 billion.
Cape Towns R43 billion budget is more than both Johannesburg’s budget and Durban’s combined. The city is expected to spend 105% more than Johannesburg over the 2023/24 financial year.
On top of widespread social packages, the budget includes:
- A R2.3 billion ‘end load-shedding’ plan;
- 40% bigger infrastructure budget, surpassing even the World Cup investment at a record R11 billion;
- Big increases of 100% or more for better sanitation networks to meet the needs of a growing city;
- R2.2 billion for new water sources, R2.6 billion for better roads; and
- R860 million in technology to make Cape Town safer, including CCTV, drones, and dashcams.
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