The New Development Bank (NDB) and National Treasury have signed a $200-million loan agreement to support Stage 1 of the Olifants Management Model Programme (OMMP), National Treasury announced on Friday.

The financing strengthens the partnership between the South African government and the NDB in advancing the country’s sustainable infrastructure priorities.

The OMMP is a pioneering 50:50 public-private collaboration between government and the private sector industrial users, represented by the Badirammogo Water User Association (BWUA).

The multi-stage, source-to-tap water infrastructure development programme, registered as Strategic Integrated Project 19, is designed to accelerate the expansion of bulk raw and potable water infrastructure across the northern and eastern limbs of the Bushveld Igneous Complex in Limpopo.

The bulk water supply scheme, abstracting water from Flag Boshielo dam on the Olifants river, will help address bulk water supply needs in Mogalakwena local municipality, supply bulk raw water to industrial users and feed the water treatment works that will provide potable water to communities across the municipality.

By expanding access to reliable water supplies, the project is expected to strengthen water security and support economic activity in the region.

Stage 1 of the OMMP comprises critical bulk raw water pipelines, pump stations, associated water treatment infrastructure and supporting energy solutions.

In July, the BWUA passed a significant financing milestone after achieving financial close with its mezzanine debt lender, climate-focused blended finance investment manager Climate Fund Managers.

The milestone followed the successful commercial close of Stage 1 in December and the start of the detail design, limited procurement and construction in February.

The sovereign loan from the NDB to South Africa, represented by National Treasury, will finance the public-sector contribution to Stage 1.

The loan, with an 11-year tenor and three-year grace period, will support sustainable water infrastructure at local-government level on favourable financing terms.