The South African government and the New Development Bank (NDB) have signed loan agreements totaling $405 million USD, equivalent to approximately R7.4 billion. These funds are designated to finance the Central Hospital project in Limpopo and the Magalies large-scale water supply scheme.
These credit arrangements, announced by the National Treasury on Friday, are part of the government's efforts to strengthen critical infrastructure while meeting the growing demand for medical services and water supply.
The NDB will provide $200 million USD for the Central Hospital project in Polokwane, and an additional $205 million USD for the Magalies water supply scheme.
The National Treasury emphasized that these agreements continue the partnership between South Africa and the multilateral lender in advancing sustainable infrastructure development.
New tertiary hospital planned in Polokwane
The Central Hospital in Limpopo project involves the construction of a new 488-bed tertiary central hospital in Polokwane. According to the Treasury, the goal of this project is to strengthen tertiary healthcare services in the province, which is experiencing increasing pressure on its healthcare system.
The Treasury noted that the province faces significant healthcare challenges, including the rising need for tertiary level services, aging hospital infrastructure, and a shortage of specialized medical facilities.
The planned facility will be equipped with modern, sustainable, and patient-centric infrastructure systems, including advanced diagnostic, treatment, and information technology. This facility is expected to become the main referral hospital for Limpopo, supporting specialized medical care, medical education, clinical research, and healthcare worker training.
Water supply aims to solve problems in six municipalities
The $205 million Magalies large-scale water supply scheme is intended to improve access to reliable drinking water in parts of Limpopo and North West. The project will address the chronic water deficit affecting six municipalities: Bela-Bela, Modimolle-Mokgofong, Mogalakwena, Moretele, Moses Kotane, and Rustenburg, where current demand exceeds available supply.
The Treasury characterized this project as a 'flagship investment aimed at improving reliable access to drinking water and supporting inclusive growth in the North West and Limpopo provinces.' The scheme is expected to enhance water security for households, businesses, and government institutions in the affected areas.
Both loans have a repayment period of 10 years, including a four-year grace period, and the interest rate is linked to the Secured Overnight Financing Rate (SOFR) plus 0.93508%. The Treasury reported that this financial package is part of the government's broader infrastructure agenda and was secured under favorable concessional terms.
The Department expressed gratitude to the NDB for its continuous partnership and support, which are critical to maintaining course and advancing South Africa's goals in infrastructure and long-term sustainable development. The Treasury added that these two loans, along with funding received from other multilateral development partners, allowed the government to meet the requirement of attracting $3.2 billion in foreign currency for the 2026/27 fiscal year.