Transnet signs R5bn loan with New Development Bank to modernise freight rail, logistics sector
The deal was sealed in Cape Town on Friday morning at the ninth annual general meeting of the NDB, also known as the BRICS Bank.
CAPE TOWN - Transnet has signed a R5 billion loan with the New Development Bank (NDB) to modernise the freight rail and logistics sector.
The deal was sealed in Cape Town on Friday morning at the ninth annual general meeting of the NDB, also known as the BRICS (Brazil, Russia, India, China, and South Africa) Bank.
This latest loan is in addition to 13 other loans the government and its entities have taken from the bank, in a portfolio of over US$5.8 billion.
With the local economy struggling to grow amid a crumbling logistics sector, this new financing deal is expected to restore freight rail volumes and improve operational performance.
New BRICS members Egypt, the United Arab Emirates, and Bangladesh are attending the gathering for the first time since they were added to the bloc of developing economies.
The annual meeting of the NDB’s board of governors is taking place under the theme of "Investing in a Sustainable Future".
This latest loan deal signed by Transnet is the third it has taken from the bank since 2018. It loaned R1 billion in January for transport infrastructure.
Minister of Finance Enoch Godongwana said investment in infrastructure is critical to achieving the United Nations (UN)’s sustainable development goals.
“In addition, there’s a need for sizeable increases and greater stability in the flow of private capital investment. The NDB can play an essential role in mobilising private investment and ensuring it flows where it’s needed most.”
Transnet group CEO Michelle Phillips said this latest investment is important to accelerate the implementation of the company’s recovery plan and economic reforms.