South Africa’s largest metro, the City of Johannesburg, is seeking public comment on a proposed R3.8bn loan to upgrade ageing power infrastructure.
In a newspaper advert on Friday, Joburg city manager Floyd Brink said the Kreditanstalt für Wiederaufbau (KFW) would make available €200m (about R3.8bn) toward “City Power electrical infrastructure”.
The municipality has long been plagued by crumbling roads and deteriorating water and electricity networks, prompting President Cyril Ramaphosa, during an oversight visit to the city a year ago, to propose the establishment of a presidential working group.
This is part of efforts to address service delivery challenges in a metro responsible for 16% of South Africa’s GDP and employing 12% of the national workforce.
Ramaphosa noted on the visit that the city faced “enormous challenges, ranging from financial and governance instability to rapidly deteriorating infrastructure”.
Brink said the loan would be at an “indicative interest rate below fixed rate of 9% per annum for capital expenditure programmes in the 2025/26 to 2027/28 financial years in line with the medium-term budget”.
The Joburg metro has an R89.4bn budget for 2025/26, which includes R80.7bn in operating expenditure and an R8.7bn capital budget. During the year under review, the metro allocated R4.6bn over three years to City Power to enhance energy resilience and stabilise the grid.
In June 2025, City Power and the Joburg metro agreed to settle R3.2bn in outstanding debt with Eskom over four years, after a dispute over a higher amount (R4.9bn). As part of the agreement, Eskom wrote off about R830m in penalties and interest.
“The amounts borrowed by the CoJ under the loan agreement will be used towards financing City Power electrical capital expenditure,” said Brink, adding the metro will not provide security for the loan.
“Interest will be payable quarterly in arrears on each payment date, and capital will be payable in sixty semi-annual repayments. A one-off total front-end cost of .5% of the nominal loan amount will be payable to KFW.”
The deadline for public comments and representations is 3pm on April 7.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.