The African Development Bank (AfDB) has released the first tranche of its $1 billion loan to Transnet, the State-owned conglomerate managing the country’s ports, railways and pipelines.
This disbursement is the first in a series of four tranches planned for an unparalleled financing arrangement to support Transnet’s business’s recovery plan.
Approved by the Bank’s Board of Directors five months ago, the funding underpins a recovery plan to address pressing operational challenges at Transnet, while bolstering critical infrastructure.
According to AfDB, the funding will allow Transnet to commence the first phase of its ambitious R152.8 billion five-year investment plan to upgrade existing infrastructure while enhancing key logistic chain segments.
ALSO READ: Transnet secures $1.5 billion loan.
“This swift disbursement shows the Bank’s commitment to the private sector in Africa, which is essential for supporting sustainable economic growth,” said Solomon Quaynor, Vice President for Private Sector, Infrastructure and Industrialization at AfDB Group, speaking on the sidelines of the Africa Investment Forum 2024 Market Days in Rabat, Morocco, last week.
Quaynor suggested that the efficiency of the disbursement “reflects Transnet’s fulfilment of the Bank’s rigorous requirements for governance, the environmental stewardship, and social responsibility”.
Transnet has faced significant operational hurdles for several years, including mismanagement, under-investment, equipment theft, vandalism and the long-lasting impacts of the Covid-19 pandemic.
With over 30,000 kilometres of railway infrastructure – the largest in any emerging economy – Transnet plays a vital role in Africa’s southern region.
Its railway network links South Africa’s ports with key regional partners, including Botswana, Zambia, Zimbabwe and the Democratic Republic of Congo, and supports operations in Durban, KwaZulu-Natal, the fourth-largest container terminal in the southern hemisphere.
READ MORE: Finance Minister Godongwana welcomes R5 billion NDB loan.
