Posted on July 22, 2024
The African Development Bank (AfDB) has approved a ZAR 18.85 billion (US$1 billion) corporate loan for South Africa’s state-run integrated freight transport company Transnet for its recovery and growth plans.
AfDB vice president responsible for private sector, infrastructure and industrialisation projects, Solomon Quaynor said in a statement on Friday that the 25-year loan, which was approved by its board of directors on July 12, is fully guaranteed by the South African government.
Quaynor said the loan would facilitate the first phase of Transnet’s ZAR152.8 billion five-year capital investment plan to improve its existing capacity ahead of expansion for the priority segments throughout the transport value chain.
“Our partnership will enable Transnet to execute a comprehensive Recovery Plan, addressing operational inefficiencies, particularly in rail and port sectors,” he said.
Transnet has recently faced operational challenges in its critical rail and port businesses, resulting from under-investment in infrastructure and equipment, theft and vandalism, and external shocks such as floods and the effects of the COVID-19 pandemic.
It has since October 2023 embarked on a recovery plan under which it 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.
The company’s freight system’s activities contribute significantly to South Africa’s economy, and its operations serve as key conduit for goods destined landlocked countries such as Botswana, Zambia, Zimbabwe and the Democratic Republic of Congo through the Port of Durban.
