The New Development Bank (NDB), the multilateral lender established by the original BRICS bloc members, is providing South Africa with a $1bn loan to help finance infrastructure upgrades in the country's eight largest so-called metropolitan municipalities.

The funding will be used to improve water supply, sanitation and waste management systems in Johannesburg, Tshwane, Ekurhuleni, eThekwini, Cape Town, Nelson Mandela Bay, Buffalo City and Mangaung, Business Day reported.

The loan comes as South Africa grapples with deteriorating municipal infrastructure and service delivery failures. President Cyril Ramaphosa has acknowledged that many municipalities are dysfunctional and unable to provide reliable basic services.

Recent water outages in Johannesburg, Pretoria and other urban centres have highlighted the extent of the challenges facing local governments, which include ageing infrastructure, years of underinvestment and a shortage of technicians.

NDB was established in 2015 by Brazil, Russia, India, China and South Africa. The Shanghai-based lender has become an increasingly important source of long-term financing for Africa’s most industrialised country over the past five years, which is among its top borrowers.

In June 2020, NDB approved a $1bn emergency loan to help the government address the health and economic impact of the Covid-19 pandemic. A further $1bn facility was approved in April 2021 to support the country's economic recovery from the crisis.

More recently, the bank has shifted its focus towards infrastructure. In August 2024, the NDB approved a $1bn loan to finance water and sanitation projects under South Africa's Municipal Infrastructure Grant programme, aimed at reducing service backlogs in poorer communities. In early 2025, it also approved a ZAR1bn ($55mn) facility for the Industrial Development Corporation to support investments in bulk water and healthcare infrastructure.

Since 2016, NDB has financed $973mn in South Africa’s energy sector — adding approximately 1,600 MW of capacity, 7,500 GWh of annual supply and cutting 7.2 million tonnes of CO₂ each year, according to the lender.

NBD operates as a multilateral development bank to mobilise resources for infrastructure and sustainable development projects, prioritising “high-impact operations that are climate-smart, disaster-resilient, technology-integrated, and socially inclusive”.

It was founded to offer developing nations financing independent of the World Bank and other institutions seen as being Western-dominated. Critics say it also provides borrowers a shield from international economic sanctions. The NBD has also prioritised lending in local currencies rather than relying on US dollars.

The “BRICS bank”, as it is known informally, supports public and private projects through loans, guarantees, equity participation, and other financial services, and works closely with other development banks, such as the African Finance Corporation and Asian Development Bank.

As of December 2025, BRICS’s founding members accounted for 94% of subscribed shares in NDB, and Algeria, Bangladesh, Egypt and the UAE for the remainder. The bank was launched with authorized capital of $100bn, with the five founding members initially subscribing equally.

Uzbekistan on June 18 officially became the lender’s newest member country, and the first country from Central Asia to join. The total number of NDB member countries has now reached ten.