Pretoria: The Mpumalanga Municipal Utility Reform Programme has received a significant boost with the approval of a $400 million loan by the African Development Bank (AfDB) Group. The programme was announced by National Treasury during the 2025 Medium Term Budget Policy Statement and is aimed at supporting the country's Just Energy Transition by bolstering municipalities particularly affected by decarbonisation efforts.
According to South African Government News Agency, the programme will focus on reducing water and electricity losses, improving revenue collection, repairing critical infrastructure, strengthening utility management, and encouraging private-sector involvement through performance-based contracts. National Treasury's Ogalaletseng Gaarekwe stated, "We see the Mpumalanga Municipal Utility Reform Programme as an important step towards improving and stabilising municipal services. It will test a support model that strengthens operations and maintenance, planning, infrastructure, and municipal capability, helping to provide more reliable and sustainable water and energy services while advancing the Government's Just Energy Transition goals."
AfDB Vice President for Power, Energy, Climate and Green Growth Kevin Kariuki highlighted the importance of the impact well-run municipalities have on the country's developmental goals. "Strong municipalities are fundamental to South Africa's long-term development. By strengthening the financial sustainability of municipal utilities, this operation will improve electricity delivery, build more resilient local institutions, and establish a replicable model for reforms that strengthen municipalities across South Africa," he said.
The financing is backed by a guarantee under the United Kingdom's Foreign, Commonwealth and Development Office (FCDO) via the Just Energy Transition Partnership. The FCDO is also providing technical assistance in this regard. Acting British High Commissioner to South Africa Lisa Weedon stated, "The UK welcomes South Africa's efforts to advance municipal utility reform. MURP represents a practical partnership that demonstrates how innovative financing can help municipalities deliver more reliable services and create the conditions for greater investment and economic growth, while advancing South Africa's Just Energy Transition. We are pleased to support the National Treasury and its partners in delivering this important initiative."
