The World Bank has approved its first Program-for-Results (PforR) operation in South Africa, aimed at improving the delivery and sustainability of urban services across the country’s eight largest metropolitan municipalities. The initiative, called the South Africa Metro Trading Services Program, is intended to address long-standing challenges related to service reliability, financial instability, and underinvestment in infrastructure.
The program will benefit Buffalo City, Cape Town, Ekurhuleni, Johannesburg, Tshwane, eThekwini, Mangaung, and Nelson Mandela Bay. These metros collectively represent 22 million residents and contribute 85% of South Africa’s economic activity.
Under the PforR model, funding is tied directly to measurable results such as institutional reforms and improved service delivery. This approach is designed to support government-led reforms in water supply and sanitation, electricity provision, and solid waste management.
Satu Kahkonen, World Bank Division Director for South Africa said: “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. 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.”
The $925 million loan from the World Bank forms part of a broader $3 billion (R55 billion) effort by the South African government. Cities that achieve set performance targets will gain access to additional funding through a new performance-based fiscal grant system. Grants will only be disbursed if specific results are achieved.
Enoch Godongwana, Minister of Finance of the Republic of South Africa stated: “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. 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. This will contribute to local capacity building, making use of South Africa’s own institutions and processes.”
Godongwana highlighted that this reform falls under Operation Vulindlela Phase II—approved by Cabinet in March 2025—and emphasized efforts to ensure local leadership by meeting with metro mayors.
According to information from both organizations involved with implementation since 2011—the National Treasury’s Cities Support Programme (CSP)—the MTSP builds on prior experience aimed at strengthening urban governance for inclusive growth. The CSP operates within these same eight metros with support from partners including the World Bank.
The PforR instrument was developed by the World Bank as part of its strategy for linking development finance more closely with tangible outcomes at country level. It aims to build institutional capacity while ensuring that funds are released only after independently verified benchmarks have been met.