South Africa secures $405 million NDB loan for hospital and water projects

South Africa's National Treasury has signed two loan agreements worth a combined $405 million with the New Development Bank (NDB), the multilateral lender established by BRICS nations. The financing will support critical infrastructure in the health and water sectors.

The larger of the two loans, valued at $205 million, will go toward the Magalies Bulk Water Supply Scheme. This project aims to address chronic water shortages across six municipalities in Limpopo and North West provinces, where current demand exceeds available supply.

The second loan, amounting to $200 million, will fund the construction of a 488-bed tertiary hospital in Limpopo province. The facility is designed to expand access to specialised healthcare services in the region.

Both loans carry a 10-year maturity, including a four-year grace period. Interest will be charged at the daily Secured Overnight Financing Rate (SOFR) plus a margin of 0.93508 percentage points.

The NDB was established in 2015 by Brazil, Russia, India, China, and South Africa to finance infrastructure and sustainable development projects in emerging markets. In 2021, the bank expanded its membership to include non-founding countries.