The African Development Bank (AfDB) has disbursed the first tranche of a $1 billion corporate loan to Transnet, South Africa's state-owned freight tra
The African Development Bank (AfDB) has disbursed the first tranche of a $1 billion corporate loan to Transnet, South Africa’s state-owned freight transport and logistics company, as part of a broader recovery and investment initiative.
This funding, which is part of a four-tranche financing arrangement, underscores the AfDB’s support for Transnet’s strategic recovery and infrastructure improvement plans. The $1 billion loan (ZAR 18.85 billion) will enable Transnet to implement the initial phase of its five-year ZAR 152.8 billion ($8.1 billion) investment plan. This plan prioritizes the modernization and enhancement of rail, port, and pipeline infrastructure critical for economic growth.
The AfDB has been a longstanding partner of Transnet since 2010, emphasizing its role in fostering sustainable economic growth in Africa. In addition to the loan, the AfDB will provide grants to support energy efficiency measures, net-zero initiatives, and railway sector reforms.
Transnet
Transnet operates over 30,000 kilometers of railway infrastructure, the largest network in any emerging economy. It plays a pivotal role in South Africa’s GDP, contributing 30-40%, and handles 75% of the country’s imports and exports. Its railway and port operations serve as key trade gateways for South Africa and regional partners, including Botswana, Zambia, Zimbabwe, and the Democratic Republic of Congo.
Transnet is recovering from a period of significant financial and operational challenges, including service disruptions. The Government of South Africa, in collaboration with the AfDB, is implementing governance reforms, open rail access policies, and other measures to promote private sector involvement in logistics infrastructure and operations.
Solomon Quaynor, AfDB’s Vice President for Private Sector, Infrastructure, and Industrialization, stated that this partnership aligns with South Africa’s strategic roadmap for freight logistics, overseen at the presidency level.
Michelle Phillips, Transnet’s Group CEO, highlighted the importance of the loan in stabilizing and improving the rail network and supporting the South African economy. She also emphasized the complementary role of grant funding in advancing energy efficiency and infrastructure preparation.