Cape Town – The City of Cape Town has secured €100 million (about R2bn) in developmental finance towards its mega R43 billion medium-term infrastructure plans.
The City said that Cape Town has passed a record infrastructure investment budget of R43 billion over the medium-term. The City aims to execute this using a blended finance strategy, including revenue, grant funding and loans.
The €100 million from AFD, the French development bank – amounting to just over R2bn on the date of issuing – is a developmental loan at a more favourable rate when tested against the market.
AFD has been active in South Africa since 1994 and has a long-standing relationship with the City, with its first loan issued to the metro in 2013.
AFD’s intention is to support investments that will address socio-spatial inequalities and improve the City’s resilience to climate change events.
The funding will be spread across several categories of infrastructure, including water, sanitation (49%), urban mobility (24%), and access to electricity (17%).
“Cape Town has an ambitious infrastructure investment portfolio of R120 billion over the next 10 years. 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.
“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.
“We are grateful to our partners – including the AFD – who recognise our clear vision and plans for equitable development in the future,” said Hill-Lewis.
AFD Southern Africa regional director and country director for South Africa, Audrey Rojkoff, said: “AFD has partnered with the City of Cape Town on a number of key impact areas, including municipal infrastructure, biodiversity and water security.
“With this loan, we hope to further support the City in addressing socio-spatial inequalities and sustainable climate-resilient development.”
Besides financial funding in the form of loans and grants, AFD has also provided technical assistance to plan major infrastructure projects.