The World Bank has approved a R15 billion ($925 million) loan to support South Africa’s Metro Trading Services Program, a landmark initiative aimed at improving the delivery and sustainability of essential urban services in the country’s largest cities. It marks South Africa’s first-ever Program-for-Results (PforR) operation, a results-based financing model increasingly used across Africa to strengthen governance and accountability.
Over the past decade, South Africa’s major metropolitan areas have faced mounting challenges in maintaining reliable access to water, electricity, and waste management. Ageing infrastructure, financial instability, and declining service quality have left millions of residents and businesses struggling with disruptions.
The new program will benefit eight metropolitan municipalities: Buffalo City, Cape Town, Ekurhuleni, Johannesburg, Tshwane, eThekwini, Mangaung, and Nelson Mandela Bay, which together are home to about 22 million people and generate roughly 85% of the country’s economic output.
Through the PforR model, the World Bank will disburse funds only when specific, measurable results are achieved. The initiative will support reforms and institutional improvements in water supply and sanitation, electricity distribution, and solid waste management — services that are crucial for inclusive growth and urban resilience.
“The Metro Services Trading Program represents a milestone in South Africa’s partnership with the World Bank Group, showcasing a shift toward results-driven financing to accelerate progress in public service delivery and governance,” said Satu Kahkonen, World Bank country director for South Africa. “This operation is designed to incentivize real performance improvements, accountability, and institutional reforms, contributing to better lives and livelihoods.”
The $925 million World Bank loan forms part of a broader R55 billion ($3 billion) government reform plan. Cities that meet performance targets will unlock further funding to expand and improve critical services. Under the model, the National Treasury will allocate grants to metros based on results — funds will only be released once targets are independently verified, promoting transparency and performance-driven governance.
“This six-year program, designed by the Government of South Africa and backed by the World Bank, will support the turnaround of essential services and enhance the resilience of our cities,” said Finance Minister Enoch Godongwana. “Metros will unlock incentive funding by demonstrating improved performance in water, electricity, and waste management. This will build local capacity by strengthening our own institutions and systems.”
Godongwana added that the trading services reform forms part of Operation Vulindlela Phase II, the government’s flagship structural reform initiative approved by Cabinet in March 2025. The finance minister has also met with metro mayors to ensure reforms are driven at the local level.
The World Bank’s PforR model, which focuses on “payment for good performance,” has been increasingly adopted across Africa to promote transparency in public spending. It aligns financing with measurable outcomes, such as improved revenue collection, asset management, and institutional reforms — helping governments deliver services more efficiently.
The Metro Trading Services Program builds on the National Treasury’s Cities Support Programme (CSP), launched in 2011 to improve city governance and drive inclusive urban growth. The CSP, implemented in partnership with the World Bank, has been instrumental in strengthening municipal performance and fiscal management across South Africa’s metros.
