• World Bank approves $1.5B loan to support reforms and infrastructure in South Africa

• Funds to help add 3,500 MW of renewable capacity, 200 km of transmission lines

• Energy crisis has cut potential GDP by 20% since 2008, says PIC

South Africa has secured a $1.5 billion loan from the World Bank to support structural economic reforms and improve infrastructure, the institution announced on Monday, June 9, 2025.

The funds will help the government reach its target of adding 3,500 megawatts of renewable energy capacity by March 2027 and attract private investment to build 200 kilometers of new transmission lines. The loan arrives amid sluggish economic growth and unemployment estimated at about 33%.

The reforms include plans to improve operations at Transnet, the state-owned ports and railway company, to expand railway capacity and open the sector to private operators.

“Our ongoing partnership with the World Bank will assist us to move forward with greater speed on the reforms vital to transforming our infrastructure landscape,” said Finance Minister Enoch Godongwana.

South Africa has faced a severe energy crisis since 2008, driven by the national utility Eskom’s failure to meet demand due to aging coal-fired plants and limited generation capacity. Power cuts—some lasting up to 12 hours a day, have intensified in recent years.

According to a March 2023 estimate by the Public Investment Corporation (PIC), these rolling blackouts have reduced the country’s potential GDP by around 20% since they began in 2008.

In 2023, the World Bank also approved a $1 billion loan to support South Africa’s energy sector reform.