AfDB approves $1b loan for S. Africa’s Transnet

The African Development Bank (AfDB) has approved a $1 billion loan for South Africa’s Transnet to support the troubled logistics firm’s recovery plan, both entities announced on Thursday.

State-owned Transnet has struggled with providing adequate freight rail and port services in South Africa due to equipment shortages and maintenance backlogs after years of under-investment. These challenges have negatively impacted commodity exports and other sectors such as manufacturing and retail, weakening Africa’s most advanced economy.

Transnet and the AfDB stated in a joint announcement that the 25-year loan is fully guaranteed by the government of South Africa. “It will facilitate the first phase of the company’s ZAR 152.8 billion rand ($8.1 billion) five-year capital investment plan to improve its existing capacity ahead of expansion for the priority segments throughout the transport value chain,” the statement said.

Transnet’s recovery plan, unveiled in October 2023, aims to restore freight volumes and return the company to profitability within 18 months.

Attribution: Reuters