Cape Town – The African Development Bank Group has approved an R18.85 billion ($1 billion) loan to Transnet to support its recovery and growth plans.
Transnet, facing operational challenges due to underinvestment, theft, vandalism, and external shocks, will use the loan to improve its rail and port infrastructure.
“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 its energy efficiency efforts and with Infrastructure Project Preparation initiatives,” Group Chief Executive of Transnet Michelle Phillips said.
The loan is part of Transnet’s five-year, R152.8 billion ($8.1 billion) capital investment plan and is guaranteed by the South African government.
“The company is committed to addressing past challenges, fostering integrity, and enhancing efficiency within the organization. It has made progress in some key areas, including reforms in governance procurement and financial management,” a joint statement by Transnet and the African Development Bank said.
The loan includes grant funding for energy efficiency and infrastructure project preparation.
Transnet’s recovery plan, launched in October 2023, focuses on rehabilitating infrastructure and relaunching operations to meet customer demands.
The initiative aligns with South Africa’s strategic ‘Roadmap for Freight Logistics System’ and aims to address operational inefficiencies.
Transnet, a long-term client of the African Development Bank, employs over 50,000 people and is crucial for South Africa’s economy and regional trade.
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Compiled by Betha Madhomu
