NDB Backs South Africa’s Road Revival with ZAR7 Billion Loan
In a bold move to revitalise South Africa’s ageing road network and bolster economic resilience, the New Development Bank (NDB) has signed a ZAR7 billion loan agreement with the South African National Roads Agency SOC Limited (SANRAL).
The signing ceremony, held on 22 July 2025 in Johannesburg, marks a milestone in strategic infrastructure financing within the BRICS framework and underscores the critical role of transport infrastructure in driving national development.
A Strategic Partnership for Sustainable Infrastructure
The partnership between NDB and SANRAL centres on a shared vision: upgrading South Africa’s national roads to unlock economic opportunities, improve logistics, and connect communities more effectively. The loan is tailored to fund vital projects along key freight corridors, focusing on expanding road capacity, rehabilitating ageing bridges, and streamlining intersections.
Importantly, the project finance is denominated in South African Rand (ZAR), shielding SANRAL from exchange rate volatility and aligning repayments with local revenue streams. This structure enhances financial predictability and demonstrates a deeper understanding of South Africa’s fiscal landscape.
“This loan agreement with SANRAL demonstrates the New Development Bank’s commitment to partnering with South Africa in building resilient and efficient infrastructure that drives economic transformation. We are proud to support projects that will improve the quality of life for millions of South Africans” said Monale Ratsoma, Chief Financial Officer at NDB.
Infrastructure with a Broader Purpose
This funding will deliver substantial improvements across South Africa’s road network, particularly along transport arteries critical to domestic trade and regional integration. With logistics costs notoriously high in the region, road enhancements are expected to reduce travel times, increase safety, and ensure smoother movement of goods and commuters.
Key upgrades include:
- Highway widening to alleviate congestion and improve traffic flow
- Bridge rehabilitation to meet modern safety and engineering standards
- Intersection improvements to enhance safety and efficiency
“The investment from the New Development Bank is a vital step towards upgrading our national road network. It will enable us to deliver safer, more reliable roads that underpin economic growth and social development” emphasised Reginald Demana, CEO of SANRAL.
The Backbone of South Africa’s Economy
South Africa’s road system is central to its economic and social well-being. Roads are the lifeline for trade, tourism, and job access, particularly in a country where rail capacity has been in steady decline. According to the World Bank, transport costs in South Africa are among the highest globally, accounting for nearly 12% of GDP.
With over 80% of freight in South Africa moved by road, this investment offers a much-needed shot in the arm for the logistics sector. Reduced costs and travel times will not only benefit large logistics firms but also small and medium-sized businesses, many of which rely on efficient transport networks to reach markets.
Beyond trade, better roads also support access to healthcare, education, and employment, especially in rural and peri-urban areas. Upgrading infrastructure is no longer just a matter of convenience; it’s a necessity for inclusive development.
A Vote of Confidence from the BRICS Institution
The New Development Bank, formed by the BRICS nations (Brazil, Russia, India, China, and South Africa), was established to counterbalance the dominance of traditional multilateral lenders like the World Bank and IMF. Since its launch in 2015, NDB has funded over 100 projects globally, prioritising sustainable infrastructure and resilience.
South Africa, as a founding member and host of the bank’s Africa Regional Office, continues to benefit from its tailored financing approach. NDB has already committed over USD 5 billion to South African projects spanning transport, water, and energy.
This latest ZAR7 billion injection is a reaffirmation of that commitment. Unlike many international lenders, NDB’s local currency lending model aligns closely with national objectives and economic realities.
Building Roads and Rebuilding Confidence
Founded in 1998, SANRAL has become synonymous with national road development in South Africa. Operating under the Ministry of Transport, SANRAL manages over 22,000 kilometres of national roads, including tolled and non-tolled segments.
Despite challenges ranging from funding gaps to public resistance over tolling, SANRAL remains a key player in the country’s infrastructure drive. This latest agreement with NDB provides a clear mandate to accelerate delivery and improve transparency.
In recent years, SANRAL has focused on:
- Expanding the national road footprint
- Prioritising road safety measures
- Increasing the use of local contractors and skills development
The NDB loan will further reinforce these efforts, with built-in mechanisms for performance monitoring and environmental safeguards.
Aligning with National and Regional Priorities
This project aligns seamlessly with South Africa’s National Development Plan (NDP) and the African Union’s Programme for Infrastructure Development in Africa (PIDA). Both frameworks underscore the transformative impact of quality transport infrastructure on regional integration, investment attraction, and sustainable urbanisation.
In addition, the timing couldn’t be better. With South Africa’s economy showing tentative signs of recovery, infrastructure-led growth is now front and centre of the government’s agenda. President Cyril Ramaphosa has repeatedly called for greater public-private partnerships and the unlocking of capital to address the country’s infrastructure backlog.
Wider Implications for the Continent
South Africa’s infrastructure ambitions also have a ripple effect across the Southern African Development Community (SADC). As the region’s most industrialised economy and logistics hub, improvements in South African transport corridors enhance the competitiveness of neighbouring landlocked nations like Botswana, Zimbabwe, and Lesotho.
NDB’s support for cross-border infrastructure has previously included projects in Mozambique and Angola, and there is growing momentum to expand this approach. Future partnerships may see regional infrastructure packages that pool resources across borders to deliver greater impact.
Building Momentum for the Road Ahead
This ZAR7 billion loan is more than just a financing deal. It’s a strategic leap forward in reshaping how infrastructure is funded, delivered, and maintained in Africa’s most advanced economy. By putting local needs, sustainable development, and financial resilience at the heart of the agreement, SANRAL and NDB are creating a new blueprint for progress.
The benefits will be felt not only in smoother roads and faster commutes, but in a more connected, inclusive, and competitive South Africa.
