South Africa has secured a $1.5 billion World Bank loan to support reforms aimed at easing infrastructure bottlenecks, boosting economic growth and creating jobs, its National Treasury said on Tuesday.

The Development Policy Loan will be spent on the water and sanitation, freight transport and electricity sectors, the Treasury said in a statement.

The loan offers a favourable interest rate and flexible repayment terms, contributing to minimising the rise in debt service costs, the Treasury added.

It said the loan has a 15-year maturity, including a three-year grace period, and carries an interest rate of six-month SOFR (Secured Overnight Financing Rate) plus 1.35%.

Together with financing from other multilateral lenders, the loan has enabled the South African government to meet its 2026/27 foreign currency borrowing requirement of $3.2 billion.

The World Bank said the financing was the fourth in a series of stand-alone Development Policy Loans to South Africa since 2022.

It is the first that aims to support improvements in water and sanitation.