The City of Johannesburg has concluded a R3.8 billion (€200 million) concessional loan agreement with German development bank KfW to help address City Power’s electricity infrastructure backlog estimated at more than R40 billion.
The funding will support capital expenditure projects between the 2025/26 and 2027/28 financial years as part of the city’s efforts to address an electricity infrastructure refurbishment, maintenance and modernisation backlog estimated at more than R40 billion.
According to the city, the funding will be directed towards transformer replacement, substation upgrades, restoration of medium- and low-voltage networks, smart metering, renewable energy initiatives, public lighting projects and digital energy infrastructure.
The targets set for the programme by 2028 include:
- Installation of 500 MVA of new transformer capacity
- Reductions in technical distribution losses from 11,5% to 9,8% and commercial losses from 18,35% to 13,2%
- Increases in annual public lighting installations from 700 to 1 700 units
The city said the programme is expected to improve network reliability, strengthen energy security, reduce electricity losses and support City Power’s long-term financial sustainability.
The loan, announced on May 29, is one of the largest concessional development finance facilities extended to a South African municipality and is part of Johannesburg’s Just Energy Transition programme.
City of Johannesburg Group Chief Financial Officer Tebogo Moraka said the facility carries a fixed interest rate of 8,56%, is fully rand denominated, requires no security and includes a five-year grace period before repayments begin.
According to the city, the structure limits exposure to foreign exchange risk while preserving municipal assets and revenue streams.
