The South African National Roads Agency SOC Limited (Sanral) has signed a R7 billion loan agreement with the New Development Bank (NDB) to support its toll portfolio projects in the country.
Speaking at the official signing ceremony of the loan agreement in Johannesburg on Tuesday, Sanral board member, Mahesh Fakir, said the roads agency was looking forward to the positive impact of the funding.
He also said the funding would greatly assist the road agency to carry out its mandate.
“This loan agreement comes against the backdrop where the South African Government under President Cyril Ramaphosa will be spending almost a trillion rand in the next three years on the development of our country’s infrastructure,” said Fakir.
“We are proud to be able to say that we are going to spend these funds on our road infrastructure projects, with key road works such as upgrading our national roads, widening carriageways, building extra lanes, as well as many other aspects that relate to road infrastructure.”
Fakir also said key projects that would be funded through the loan included the N3 Paradise Valley to Marianhill Toll Plaza, N3 Marianhill Toll Plaza to Key Ridge, N1 Zandkraal to Scottland, and the N1 Scottland to Winburg South project.
These four projects represent over R12.7bn in investment, with more than R3.8bn reserved for small and medium businesses and other targeted enterprises, close to R1bn for labour-driven economic inclusion and logistical, safety, and mobility enhancements for key trade routes.
Sanral CEO Reginald Demana said the agency would undertake massive investment in new infrastructure projects, while also upgrading and maintaining national roads infrastructure.
“The loan agreement will support and allow Sanral to continue paving the way to progress for the South African economy and society in general. Sanral is looking forward to the positive impact that will emanate from the long-overdue funding that will greatly assist the entity carry out its mandate.”
Demana said the loan would become effective as soon as standard conditions had been met. The balance of the borrowing limit, pegged at R16.5bn not utilised by the NDB loan would be used to raise funds in the domestic market, including bonds and syndicated and bilateral loans.
NDB vice president and CEO, Monale Ratsoma, said the bank was a partner that shared a common vision for the country’s future and was fully behind the agency’s mandate.
“The NDB is also proud that the financing offered is denominated in local currency. This will provide the necessary cushioning against currency fluctuations, which often tend to reduce the benefits of the support offered and increase overall risk to the fiscus and corporate balance sheets if not adequately hedged. As the NDB, we have a deliberate focus in providing local currency financing to our partners.”
