Cape Town secures over R2bn in infrastructure financing from French development bank

The City of Cape Town has secured €100 million in developmental finance towards its mega R43 billion medium-term infrastructure plans. Cape Town Mayor Geordin Hill-Lewis conducted the signing ceremony with the Agence Francaise de Developpement (AFD) today, 21 June, following Council green-lighting the finance in April.

Cape Town has passed a record infrastructure investment budget of R43 billion over the medium-term. The City aims to execute this using a blended finance strategy, including revenue, grant funding, and loans.

The €100 million from AFD, the French development bank – amounting to just over R2bn on the date of issuing – is a developmental loan at a more favourable rate when tested against the market. AFD has been active in South Africa since 1994 and has a longstanding relationship with the City, with its first loan issued to the metro in 2013. AFD’s intention is to support investments that will address socio-spatial inequalities and improve the City’s resilience to climate change events.

The funding will be spread across several categories of infrastructure, including water, sanitation (49%), urban mobility (24%), and access to electricity (17%).

‘Cape Town has an ambitious infrastructure investment portfolio of R120 billion over the next 10 years. Our aim is to position the city for job–creating economic growth and sustainability, as we build towards our long-term vision of a city of hope for all.

‘To achieve this, we must lay the foundation now in the form of water and energy security, better sanitation, a cleaner environment for all, greater urban mobility, and climate change resilience.

‘We are grateful to our partners – including the AFD – who recognise our clear vision and plans for equitable development in the future,’ said Mayor Hill-Lewis.

‘AFD has partnered with the City of Cape Town on a number of key impact areas, including municipal infrastructure, biodiversity and water security. With this loan, we hope to further support the City in addressing socio-spatial inequalities and sustainable climate-resilient development,’ said Ms Audrey Rojkoff, AFD Southern Africa Regional Director and Country Director for South Africa.

Besides financial funding in the form of loans and grants, AFD has also provided technical assistance to plan major infrastructure projects.