Cape Town Bolsters Infrastructure Development with R2.8 Billion IFC Funding

The City of Cape Town has made a significant stride in its infrastructure development plans by securing a R2.8 billion loan from the prestigious International Finance Corporation (IFC). This funding is a critical part of Cape Town’s broader R39.5-billion infrastructure expenditure aimed from July 2023 to June 2027, underlying the city’s proactive approach to growth and sustainable urban living.

Mayor Geordin Hill-Lewis expressed his pleasure at the financial boost which is set to bring about an estimated 130,000 construction-related job opportunities over the next three years. Hill-Lewis emphasized the city’s planning for a population surge, with investments primarily funneled toward improving the infrastructure in the fastest-growing and poorest areas, which include vital water, sanitation, transport, and electric services.

The 18-year tenor of the IFC’s loan aligns with Cape Town's drive to sustainably invest in long-term assets, a move synchronizing economic growth with environmental protection. The broader vision of these projects is also woven into the city’s Climate Change Strategy, reflecting its commitment to tackling global warming while upgrading urban facilities.

Cape Town's proactive outreach for international collaboration in October 2023 led to the funding agreement with the IFC. This partnership, eagerly welcomed by Cláudia Conceição, IFC's Southern Africa regional director, aims to elevate the standard of essential services in Cape Town, inducing a positive impact on both residents and businesses alike.

The financial strategy deployed by the city authorities involves a blended finance model. This approach mixes funding from Cape Town’s balance sheet with loans from both local and international markets, such as the R3.5-billion finance approved from Nedbank and the €100-million from Agence Francaise de Developpement (AFD) approved earlier in April.

As the financial year 2024/25 approaches, Cape Town City Council anticipates additional funding agreements to fulfill the infrastructure program’s remaining financial needs. This strategy showcases Cape Town's dedication to addressing its infrastructure challenges through solid international partnerships and financial instruments designed to support its ambitious development goals.