By Radarr Africa Business Desk
November 13 (Radarr Africa) – The African Development Bank Group has approved a $503.75 million loan to South Africa to support reforms that open the electricity, freight transport and water sectors to competition and private investment, the bank said.
The financing is for the Infrastructure Governance Reform Program, which is carried out within a coordinated development-partner framework led by National Treasury. The bank’s Board of Directors approved the operation, and the bank published details on November 11.
The programme builds on budget support that the bank began providing to South Africa in 2023, bringing total support to more than $1.2 billion. The first operation, the 2023 Energy Governance and Climate Resilience Support Program, provided $300 million. It backed the restructuring of the electricity sector, Eskom’s financial sustainability, the creation of the National Transmission Company South Africa (NTCSA) and wider private participation in renewable energy. A second operation, the 2025 Infrastructure Governance and Green Growth Program, provided $474.5 million. It advanced electricity-market reforms, renewable energy integration, distribution efficiency and transport reforms, and added social protection linked to the just energy transition.
Kennedy Mbekeani, the bank’s Director General for Southern Africa, said: “This operation sits squarely on the Bank’s Four Cardinal Points.”
On electricity, the reforms aim to end Eskom’s position as the sole buyer and seller of power. The National Energy Regulator of South Africa (NERSA) has licensed a market operator inside the NTCSA, Eskom’s ring-fenced transmission subsidiary. NERSA has also approved grid capacity allocation rules, which govern the priority for grid connections, and created a Market Surveillance and Competition Unit. The target is for the wholesale market to handle 10 per cent of all electricity transactions by December 2027.
In freight rail, the Transnet Rail Infrastructure Manager now allocates train paths across 21,232 kilometres of track under a gazetted network statement. The Department of Transport awarded at least 11 slot licences across six corridors in August 2025, the first such allocation for South African freight rail. The regulator is expected to approve at least six licensed new private rail and port operators by December 2027, and rail freight throughput is projected to rise from 161 million to 180 million tonnes a year.
The programme also covers ports. In December 2025, South Africa signed its first port terminal concession, a 25-year agreement with International Container Terminal Services for Pier 2 of the Durban Container Terminal. The terminal handles 46 per cent of the country’s containers, and capacity is expected to rise from 2.0 million to 2.8 million twenty-foot equivalent units by 2028. Investment in rolling stock is targeted to triple to R6 billion, about $360 million, a year.
The bank expects the reforms to deliver shorter truck queues at the Port of Durban, more reliable water supply and competitively priced electricity.
