Citigroup invests R1.4bn in South Africa’s new mega-city

Citigroup is teaming up with South Africa’s Gauteng provincial administration to fund almost R1.4 billion of investment in a new mega-city project and airport south of Johannesburg.

The US lender, through its South African unit, will make a seven-year loan facility available to a special purpose vehicle that will directly invest in infrastructure for the Mega River City on the banks of the Vaal River, Citi South Africa head Peter Taylor said.

The development could attract much as R30 billion in additional investment, he said.

“The new Vaal river city project will take the form of a public-private partnership,” Taylor said in an interview. “It will constitute a mixed-use metropolitan city development, an international airport, along with logistics, manufacturing and agricultural hubs.”

Gauteng, South Africa’s richest province, has identified five corridors or sites where it wants to boost economic development and create jobs, with the new city the first of the envisioned projects.

It will span at least 1,200 hectares of land and adjoin an industrial hub where steel-maker ArcelorMittal SA and petrochemical giant Sasol Ltd. have processing facilities.