Mpumalanga’s drive to build stronger, more reliable municipal services has received a major international vote of confidence. The African Development Bank (AfDB) Group has approved a $400 million loan for the Mpumalanga Municipal Utility Reform Programme, a landmark initiative designed to strengthen water and electricity services in the province’s municipalities.
First announced by National Treasury during the 2025 Medium Term Budget Policy Statement, the programme supports South Africa’s Just Energy Transition by bolstering municipalities most affected by the shift away from coal — helping them become more capable, better funded and more resilient.
What the Funding Will Do
The programme takes a practical, results-driven approach to municipal services, focusing on:
- Reducing water and electricity losses
- Improving revenue collection
- Repairing critical infrastructure
- Strengthening utility management
- Encouraging private-sector involvement through performance-based contracts
“We see the Mpumalanga Municipal Utility Reform Programme as an important step towards improving and stabilising municipal services,” said National Treasury’s Ogalaletseng Gaarekwe. “It will test a support model that strengthens operations and maintenance, planning, infrastructure, and municipal capability, helping to provide more reliable and sustainable water and energy services while advancing the Government’s Just Energy Transition goals.”
A Model Other Municipalities Can Follow
The AfDB sees the programme as more than a provincial project — it is a blueprint. Kevin Kariuki, the bank’s Vice President for Power, Energy, Climate and Green Growth, underlined how well-run municipalities power national development.
“Strong municipalities are fundamental to South Africa’s long-term development. By strengthening the financial sustainability of municipal utilities, this operation will improve electricity delivery, build more resilient local institutions, and establish a replicable model for reforms that strengthen municipalities across South Africa,” Kariuki said.
If the model succeeds in Mpumalanga, it could be rolled out to municipalities around the country — multiplying the benefit of every rand and dollar invested.
International Partnership in Action
The financing is backed by a guarantee from the United Kingdom’s Foreign, Commonwealth and Development Office (FCDO) through the Just Energy Transition Partnership, with the FCDO also providing technical assistance to help the programme deliver.
“MURP represents a practical partnership that demonstrates how innovative financing can help municipalities deliver more reliable services and create the conditions for greater investment and economic growth, while advancing South Africa’s Just Energy Transition,” said Acting British High Commissioner to South Africa Lisa Weedon. “We are pleased to support the National Treasury and its partners in delivering this important initiative.”
For the people of Mpumalanga, the numbers on the loan agreement translate into something much closer to home: taps that run, lights that stay on, and municipalities with the skills and resources to serve their communities well into the future. It is a powerful example of South Africa leading with innovative financing models — and of the world backing that leadership with real capital.
Reporting based on information from SAnews.gov.za.
Photo: commons.wikimedia.org
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