R7 Billion BRICS Loan to Power SARoad Upgrades

image: Sanral/page

by Kelebogile Matlou

South Africa’s National Roads Agency (SANRAL) is close to securing a R7 billion loan from the New Development Bank (NDB), with the funds earmarked for major upgrades to transportation routes. Sanral CEO Reginald Demana confirmed during the signing of the loan agreement in Johannesburg on
Tuesday, the process now awaits a legal opinion from the state law adviser.

“The state law adviser must give a legal opinion that it’s all sound; we expect that to come within the next two weeks,” Sanral CEO Reginald Demana said. The finalisation of the loan also depends on foreign-exchange approvals from the South African Reserve Bank. Sanral announced on Monday that it had reached an agreement with the NDB, a financial institution established in 2015 by the BRICS bloc (Brazil,
Russia, India, China, and South Africa) to support infrastructure and sustainable development in member states and other emerging economies.

image: Chair Affairs/page

The R7 billion loan will contribute to a R12.7 billion project to upgrade four major freeways, alongside other national road initiatives. This marks a significant step forward for Sanral, which previously failed to secure a government-backed guarantee for a similar loan in 2019. The National Treasury raised concerns over historic debt linked to the controversial e-tolling system in Gauteng. That system was officially
discontinued last year. With the tolling issue resolved, the government has since approved a R16.5 billion debt ceiling for Sanral.

Demana said that additional funding will still be required. “We still need to go to the market to raise additional funding,” he said, referring to potential sources such as local bond investors, banks, domestic institutions, and other development-finance bodies. He also indicated that the New Development
Bank may consider providing further rand-denominated funding as part of the
agency’s broader financing strategy.