The African Development Bank Group has approved a R18,85-billion corporate loan to Transnet for its recovery and growth plans.
The 25-year loan approved by the bank group’s board of directors is fully guaranteed by the government of South Africa. It will facilitate the first phase of the company’s R152,8-billion five-year capital investment plan to improve its existing capacity ahead of expansion for the priority segments throughout the transport value chain.
The recovery plan, launched in October 2023, seeks to rehabilitate the infrastructure and accelerate the relaunch of operations over 18 months, focusing on restoring operational performance and freight volumes to meet customer demands.
Solomon Quaynor, vice-president for private sector, infrastructure and industrialisation at the African Development Bank, emphasises the significance of this support: “Transnet, the custodian of South Africa’s critical transport and logistics infrastructure, plays an indispensable role in the economy of the country, ensuring a competitive freight system and serving as a gateway to the SADC region.
“Our partnership will enable Transnet to execute a comprehensive recovery plan, addressing operational inefficiencies, particularly in rail and port sectors. It is aligned with South Africa’s strategic Roadmap for Freight Logistics System, and overseen by the National Logistics Crisis Committee, chaired at the Presidency level. This initiative signifies our commitment to enhancing national logistics capabilities and driving sustainable economic growth.”
Michelle Phillips, group chief executive of Transnet, comments: “We appreciate the support demonstrated by the African Development Bank, the loan extended by the bank will make a significant contribution to Transnet’s capital investment plan to stabilise and improve the rail network and to contribute to the broader South African economy. The accompanying grant funding to the loan will also greatly assist Transnet with to its energy efficiency efforts and with Infrastructure Project Preparation initiatives.”