AIIB Backs South Africa with $500M Climate Loan

The Asian Infrastructure Investment Bank (AIIB) has approved a $500 million sovereign-backed loan to South Africa. The deal marks the bank’s first investment in the country.

The funds will support the South Africa Metro Trading Services Program. Co-financed by the World Bank as part of a broader $3 billion national initiative, the program targets eight metropolitan municipalities that drive 85% of the country’s economic output.

These urban centers currently support 22 million residents. However, aging utility systems, rapid population growth, and worsening climate impacts continue to strain local services. The new funding aims to modernize municipal water supply, sanitation, electricity distribution, and solid waste management.

Key operational goals include reducing non-revenue water losses from 41% to 28% and cutting electricity transmission losses from 22% to 12% by 2031.

“South Africa’s metropolitan municipalities are central to the country’s economic development and climate transition. This investment marks the beginning of AIIB’s partnership with South Africa and reflects our shared commitment to building more resilient, sustainable and well-managed cities,” said Rajat Misra, Director General, Public Sector Clients Department, AIIB.

“The AIIB financing strengthens the Government’s broader package of support to improve the governance, financial management and operational performance of trading services in metropolitan municipalities,” said Duncan Pieterse, Director General, South Africa National Treasury.