The World Bank has pledged $350 million in financing to South Africa for a new credit guarantee facility aimed at attracting private investment for infrastructure projects, including an expansion of the country’s power transmission grid.
The funding will come from the International Bank for Reconstruction and Development, part of the World Bank Group, the institution said in a statement dated March 5, Reuters reported.
The facility, known as the Credit Guarantee Vehicle, is expected to mobilise around $10 billion in capital over the next 10 years, drawing contributions from private investors, commercial lenders, and institutional investors.
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South African Finance Minister Enoch Godongwana, quoted in the World Bank statement, said the vehicle would “support massive investments in transmission infrastructure” and noted that it would be incorporated as a company in the coming months.
South Africa is seeking private funding to add thousands of kilometres of new power lines and expand transformer capacity as part of efforts to recover from more than a decade of widespread power cuts.
Reuters had reported last year that the World Bank Group was considering backing the facility.
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Image Credit: Financial Post
