The African Development Bank (AfDB) has approved a $1bn (R18.2bn) loan for Transnet to support the logistics firm’s recovery plan. State-owned Transnet has faced challenges in providing freight rail and port services due to equipment shortages and maintenance backlogs from years of under-investment, impacting various sectors in Africa’s most advanced economy.
The 25-year loan, fully guaranteed by the government, will kickstart Transnet’s R152.8bn five-year capital investment plan to enhance its capacity and prioritize key segments in the transport value chain. With debts of R130bn and recent losses, Transnet aims to restore freight volumes and profitability over 18 months through restructuring its operations and infrastructure management.
The plan includes splitting the freight rail subsidiary, reducing port backlogs, and welcoming private operators on its rail network. The partnership between Transnet and AfDB signifies a major step towards revitalizing the company and positively impacting the economy.
Reuters
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