Gordhan said the 2.4 billion rand ($355 million, 248 million euro) loan would be paid out in three quarterly installments, starting this month.

The South African Reserve Bank had earlier put the amount at 2.5 billion rands, just one quarter of the amount that Mswati had reportedly sought to stave off his government’s financial collapse.

Gordhan said in a statement that the deal “contains a set of objectives that promote economic and social development, multilateral cooperation, democracy, human rights and good governance, credible and effective leadership, development of a strong civil society and respect for universal human rights and the rule of law.”

He said the requirements placed on Swaziland include “broadening the dialogue process to include all stakeholders and citizens of the kingdom” and “allowing the parties to the Swazi dialogue to determine appropriate reforms needed”.

The kingdom has been unable to secure international loans after failing to meet the International Monetary Fund’s demands to reduce its budget deficit and cut its bloated government wage bill.

But Gordhan said the South African package also requires fiscal reforms aligned with requirements of the IMF, World Bank and African Development Bank.

“While the need for fiscal reforms is the primary objective, this has to be anchored by governance reforms,” he said.

Swaziland has been battling to stay solvent after losing 60 percent of its revenues from a regional customs union, the government’s main source of income, last year.

In the past, South Africa had shared customs revenue under a generous formula that gave poorer neighbouring countries far more money than they would have earned on their own.

A new revenue-sharing system took effect last year, which Swaziland failed to factor into its budget, despite years of warning.

Gordhan said the loan would be repaid from the quarterly payments that Swaziland would normally have received from Pretoria, which administers the customs union.

Mswati is Africa’s last absolute monarch, living a jet-set life with 13 wives — each with separate palaces — and a fortune estimated at $100 million, placing him on Forbes magazine’s list of the 15 richest monarchs in the world.

In contrast, 70 percent of his 1.2 million subjects live on less than one dollar day and 25 percent of adults have HIV, the highest rate in the world.

The loan comes just in time for Mswati who had faced the prospect of schools shutting down from Friday and dwindling stocks of anti-retroviral drugs for AIDS patients.

“We are thankful” to South Africa, Mswati said at a palace briefing late Tuesday, according to the independent Times of Swaziland.

“This shows that they are good neighbours. We hope that the financial assistance we have received will assist in alleviating the country from the fiscal problems,” he added.

The king sought to deflect accusations of financial mismanagement, saying Swaziland is “not the only country faced with fiscal crisis, but the world over.”

Activists in Swaziland had called for South Africa to insist on democratic reforms as a condition for the loan, but Pretoria’s insistance on fiscal reforms as well could deepen a stand-off with Swazi public servants, who have protested against moves to trim their salaries to balance the government’s books.