HomeIndustry SectorsFinance and PolicyCity of Cape Town secures loan for wastewater treatment plant upgrades

City of Cape Town secures loan for wastewater treatment plant upgrades

Earlier this week, the City of Cape Town signed an urban wastewater management loan to the value of approximately R1,3 billion with the German government-owned KfW Development Bank.

The loan, which was offered at a highly subsidised fixed interest rate of 8.107%, will be used to finance the expansion and refurbishment of some of the City’s 25 wastewater treatment plants over the next few years.

“Cape Town is a growing city and it is important that we are able to sufficiently invest in infrastructure, the diversification of resources and the reliable provision of water services over the coming years as we build our resilience. We thank KfW for approaching the City with this offer and for their confidence in the overall management and governance of the City,” said Executive Mayor of Cape Town, Alderman Dan Plato.

This unsecured loan is payable over 15 years to spread the related costs over the lifetime of the wastewater projects to limit any undue burden on the ratepayer, the City explained in a statement.

Wastewater treatment plant projects

Earmarked wastewater treatment plant projects include Zandvliet, Cape Flats, Bellville, Macassar, Potsdam, Melkbosstrand, Mitchells Plain, Borchard’s Quarry, Hout Bay, Scottsdene, Wildevoevlei and Gordon’s Bay.

According to the City of Cape Town, all costs associated with taking up the loan have been considered in terms of affordability in advance. Read more: Smart water management

Plato further explained: “The taking up of debt is standard practice for any major city administration and all cost implications have been considered in terms of affordability in advance. This loan is in line with our commitment to becoming a more sustainable city and to adapt better to climate change challenges. It also forms part of the foundation of building a thriving, water-sensitive city.”

The City’s debt level is at an acceptable rate and the City will continue to follow a conservative approach to loan funding while balancing what investment is required for the metro going forward.

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