Transnet has secured a €300m (approximately R5.8bn) loan from the Agence Française de Development (AFD) to support efforts to decarbonise South Africa's freight sector and improve operational efficiency.
The agreement is part of France's contribution to the Just Energy Transition Partnership (JETP), which aims to support the country's transition to a low-carbon economy.
Funding targets rail, ports and energy transition
The loan will finance Transnet's freight decarbonization and corporate sustainability programme, which focuses on improving operational performance while reducing the carbon intensity of rail and port operations.
Michelle Phillips, Group Chief Executive of Transnet, said: “Transnet is committed to modernizing its rail and port infrastructure and operations to improve service quality, reliability and competitiveness while driving sustainable growth as part of its Reinvent for Growth strategy. This funding will help achieve these objectives by increasing energy efficiency and accelerating improvements.”
Fund disbursement milestones
The disbursement of the loan is conditional on Transnet meeting a series of agreed milestones, including:
Rehabilitation of 550 km of rail along key freight corridors to improve reliability and shift cargo from road to rail.
• Expansion into green hydrogen and transition mineral logistics as coal volumes decline.
• Preparation for purchase of 30 MW renewable energy.
• Strengthening environmental, social and governance (ESG) capabilities
These measures aim to reduce emissions intensity, improve service delivery and strengthen climate resilience in key freight corridors.
flexible funding structure
Unlike traditional project-based financing, the agreement allows Transnet to allocate funds across a wider programme, giving the company flexibility in responding to operational needs.
The AfD said the structure supports both economic competitiveness and decarbonization goals.
“We are particularly pleased with this operation as it reflects the shared priorities of both institutions. Transnet is a strategic actor in South Africa’s low-carbon transition, and it is a key enabler for the competitiveness of the economy.
“Investments in freight rail recovery, port modernization and transition mineral export corridors are a demonstration that South Africa’s economic competitiveness and decarbonization targets are inseparable,” said Marie-Hélène Loison, AFD’s regional director for Southern Africa.
The agreement builds on a relationship between Transnet and AFD dating back to 2009, which also includes financing for the expansion of the Cape Town Container Terminal.
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