Transnet has signed a €300 million (R5.8 billion) loan agreement with France’s Agence française de développement (AFD), with funding linked to a series of operational milestones, including the rehabilitation of key rail corridors and broader efforts to improve freight operations.
The loan supports the ‘Transnet Freight Decarbonisation and Corporate Sustainability Programme’, which includes the rehabilitation of 550km of rail along the Cape and Container corridors to improve reliability and enable a shift of freight from road to rail.
Disbursement of the funding is conditional on Transnet achieving a series of agreed milestones, including the modernisation of core transport operations to improve service quality and reliability.
The agreement also provides for the enhancement of Transnet’s business diversification, including exploring green hydrogen and transition minerals logistics as well as preparation for the procurement of 30MW of renewable energy.
Transnet group chief executive Michelle Phillips said the funding would support the company’s infrastructure and operational objectives. “Transnet remains committed to modernising its rail and port infrastructure and operations to improve service quality, reliability and competitiveness, while advancing sustainable growth as part of its Reinvent for Growth strategy. This funding will assist in achieving these objectives by enhancing energy efficiency and accelerate reforms.”
“Transnet is a strategic actor in South Africa’s low-carbon transition and it is a key enabler to the competitiveness of the economy. The investments in freight rail recovery, port modernisation and transition minerals export corridors are a demonstration that South Africa’s economic competitiveness and decarbonisation goals are inseparable,” said AFD regional director for Southern Africa, Marie-Hélène Loison.
The agreement forms part of France’s contribution to South Africa’s Just Energy Transition Partnership, implemented by AFD since 2021. Unlike traditional project finance, the loan allows Transnet to deploy funds across a defined programme rather than allocating proceeds to a single project.
