World Bank approves first results-based programme in SA to improve metro services
The World Bank has approved a major new financing programme to improve basic urban services in South Africa’s largest cities.
The South Africa Metro Trading Services Program is the country’s first-ever Program-for-Results (PforR) operation, which is expected to strengthen the financial stability and performance of water, electricity, and waste management services in eight metropolitan municipalities.
The World Bank loan of about R17 billion forms part of a broader R55 billion government initiative to reform how trading services are funded and managed.
The program will support Buffalo City, Cape Town, Ekurhuleni, Johannesburg, Tshwane, eThekwini, Mangaung, and Nelson Mandela Bay.
These metros account for 85% of the country’s economic activity and are home to nearly 22 million residents.
For many years, cities have struggled with declining reliability of services, aging infrastructure, and weakened revenue collection.
The PforR model directly links funding to performance, meaning metros will only receive funds when they meet agreed reform and service delivery targets.
Satu Kahkonen, World Bank Director for South Africa, says the approach represents a shift toward stronger accountability in public services.
"This operation is designed to incentivize real performance improvements, accountability and institutional reforms through a results-based approach, contributing to better lives and livelihoods in South Africa."
Under the programme, the national government will issue performance-based grants to municipalities. If municipalities fail to meet service improvement benchmarks, the funds will not be released.
Targets include better maintenance of infrastructure, improved billing and collection efficiency, and a more reliable water and electricity supply.
Finance Minister Enoch Godongwana says in a statement that the reforms are essential to turning around struggling metros and rebuilding trust in service delivery.
"Metros will unlock the incentive grant funding by demonstrating improved institutional and service delivery performance in water supply and sanitation, electricity and solid waste management."
The reforms form part of Operation Vulindlela Phase II, adopted by Cabinet earlier this year.
The programme builds on over a decade of support to cities through the National Treasury’s Cities Support Programme, which has focused on improving planning, governance, and financial management.
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