South Africa has secured two loans worth a combined US$405 million (about R7.4 billion) from the New Development Bank (NDB) to fund a new tertiary hospital in Limpopo and a major bulk water supply scheme serving communities in Limpopo and the North West.
The loan agreements, announced by the National Treasury on Friday, form part of government’s efforts to strengthen critical infrastructure while meeting growing demand for healthcare and water services.
The NDB will provide a US$200 million loan for the Limpopo Central Hospital Project in Polokwane and a further US$205 million for the Magalies Bulk Water Supply Scheme.
The National Treasury said the agreements continue the partnership between South Africa and the multilateral lender in advancing sustainable infrastructure development.
“The NDB and the Government of South Africa have signed two loan agreements to support the Limpopo Central Hospital Project and Magalies Bulk Water Supply Scheme projects, continuing the existing partnership to advance South Africa’s sustainable infrastructure priorities,” Treasury said.
New tertiary hospital planned for Polokwane
The Limpopo Central Hospital Project will see the construction of a new 488-bed tertiary central hospital in Polokwane.
According to Treasury, the project is intended to strengthen tertiary healthcare services in a province facing increasing pressure on its health system.
“The province faces significant healthcare challenges, including rising demand for tertiary healthcare services, aging hospital infrastructure, and shortages of specialized medical facilities,” Treasury said.
Treasury said the hospital would provide “modern, resilient, and patient-centered healthcare infrastructure equipped with advanced diagnostic, treatment, and information technology systems.”
The facility is expected to become Limpopo’s principal referral hospital and will support specialised healthcare services, medical education, clinical research and the training of healthcare professionals.
Water scheme targets shortages in six municipalities
The US$205 million Magalies Bulk Water Supply Scheme is aimed at improving access to reliable drinking water in parts of Limpopo and the North West.
The project will address chronic water shortages affecting six municipalities, Bela-Bela, Modimolle-Mookgophong, Mogalakwena, Moretele, Moses Kotane and Rustenburg, where demand currently exceeds available supply.
Treasury described the project as “a flagship investment aimed at improving reliable access to drinking water and supporting inclusive growth in the Northwest and Limpopo provinces.”
The scheme is expected to improve water security for households, businesses and public institutions in the affected areas.
Concessional financing supports borrowing programme
Both loans carry a maturity period of 10 years, including a four-year grace period, and an interest rate linked to the Secured Overnight Financing Rate (SOFR) plus 0.93508%.
Treasury said the financing package forms part of government’s broader infrastructure drive and was secured on favourable concessional terms.
“The National Treasury wishes to express its appreciation to the NDB for its continued partnership and support, which is critical to staying the course and advancing South Africa’s infrastructure development and long-term sustainable development objectives,” the department said.
Treasury added that the two loans, together with funding secured from other multilateral development partners, have enabled government to meet its foreign currency borrowing requirement of US$3.2 billion for the 2026/27 financial year.
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