France is on the verge of extending a €100m loan to South African metros to overhaul service delivery in water, waste management and the energy transition, French ambassador to South Africa David Martinon said.
The announcement lands as the national treasury’s metro trading services reform package, launched in March, gains momentum. The programme is aimed at reversing decades of deteriorating municipal governance that led to many South African cities being unable to deliver basic services.
Martinon did not name specific recipient municipalities or detail the lending institution behind the facility. He described the loan as consistent with France’s broader Africa economic strategy, which is set to be a central focus of the coming French Africa Summit in Nairobi.
“French authorities are also on the verge of providing another €100m loan to the metros in South Africa so that they can actually renovate and change the way they approach topics of service delivery in water management waste management and the energy transition,” Martinon said.
The French facility, if structured as concessional development finance, could help plug the very investment gap that the Treasury has flagged. The City of Johannesburg planned to collect R11.9bn in water revenue in 2025/26 but budgeted just R1.3bn — less than 10% — for water infrastructure. eThekwini planned to collect R22bn in electricity charges but allocated less than 5% of that to electricity infrastructure.
To address systemic underspending, Treasury has set aside R54bn in performance-linked incentives, with R27.7bn allocated over the medium term. The metro services trading reform is also expected to unlock more than R100bn in private investment in water, sanitation, electricity and waste infrastructure across the metros.
Treasury’s reform package includes legislative changes, stricter enforcement of funded budgets and financial recovery plans. It also gives the national government stronger tools to redirect funds away from underperforming municipalities to entities such as the Development Bank of Southern Africa and the Municipal Infrastructure Support Agency, where local capacity has collapsed.
The French loan’s disbursement mechanics, performance conditions and the specific metros involved had not been released at the time of the briefing.
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