International Relations Maite Nkoana-Mashabane on Tuesday signed a memorandum of understanding with the government of Swaziland to secure a loan from South Africa.
In 2011, South African government announced it considered providing a concessional loan of R2,4 billion to bail out the small kingdom from economic difficulties.
The decision was met with outrage by civil society groups.
They accuse King Mswati III of squandering resources on personal luxuries while his country lives in poverty.
Loan negotiations were not concluded in 2011 because Swaziland objected to the proposed political and economic reforms as a condition to receive the money.
South Africa's treasury is adamant that the latest announcement does not mean the loan is finalised.
Treasury's spokesperson Jabulani Sikhakhane said discussions are still ongoing.
“This is the first step but it is not a sufficient condition for a loan agreement.”
Sikhakhane said there is no indication on when the talks will conclude.
South Africa's Department of International Relations said it will provide more details about the agreement on Wednesday.
(Edited by Zethu Zulu)