The African Development Bank (AfDB) has approved a $1 billion corporate loan to Transnet, a major freight transport and logistics company in South Africa.
Transnet has faced significant operational challenges in recent years, including underinvestment in infrastructure and equipment, theft and vandalism, and external shocks such as floods affecting critical rail and port operations.
The company is now committed to addressing these challenges, enhancing integrity, and improving efficiency through a recovery plan launched in October 2023.
This plan aims to rehabilitate infrastructure and accelerate the relaunch of operations over 18 months, with a priority on restoring operational performance and freight volumes to meet customer demands.
To support these recovery and growth plans, the AfDB’s 25-year loan, fully guaranteed by the Government of South Africa, will facilitate the first phase of Transnet’s $8.1 billion five-year capital investment plan.
“Transnet, the custodian of South Africa’s critical transport and logistics infrastructure, plays an indispensable role in the country’s economy, ensuring a competitive freight system and serving as a gateway to the SADC region,” commented Solomon Quaynor, AfDB’s Vice President for Private Sector, Infrastructure, and Industrialization. “Our partnership will enable Transnet to execute a comprehensive recovery plan, addressing operational inefficiencies, particularly in the rail and port sectors.
It aligns with South Africa’s strategic ‘Roadmap for Freight Logistics System,’ 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, added, “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 stabilize 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 its energy efficiency efforts and Infrastructure Project Preparation initiatives.”
