JOHANNESBURG – The World Bank has agreed to provide South Africa with $350 million in financing for a new credit guarantee facility aimed at unlocking private financing for infrastructure, including the expansion of the power transmission grid.
The funding will come from the International Bank for Reconstruction and Development, part of the World Bank Group, the World Bank said in a statement on March 5.
The credit guarantee vehicle aims to raise approximately $10 billion of capital over a 10-year period from private investors, commercial lenders and institutional investors.
Reuters reported last year that the World Bank Group was considering providing funding for the facility.
The World Bank statement quoted South African Finance Minister Enoch Godongwana as saying the vehicle “will support large-scale investment in transmission infrastructure” and will be incorporated as a company in the coming months.
South Africa is fueling private investment with plans to add thousands of kilometers of new power lines and increased transformer capacity as it looks to recover from more than a decade of power outages.
The World Bank said the initiative will support the government's economic reform agenda.