Transnet secures R6bn funding from US credit agency

2014-08-06 17:40

Transport utility Transnet has secured a R6 billion funding guarantee for the locomotives it is buying from General Electric.

“Transnet has secured a R6bn funding guarantee with United States export credit agency US-Exim,” said the company today.

“This is a massive thumbs-up from the international investor community, affirming Transnet’s creditworthiness and South Africa’s attractiveness as an investment destination.”

The guarantee enables Transnet to raise funds in the markets for the financing of the GE locomotive transaction, said the parastatal.

“It allows for Transnet to negotiate favourable repayment terms, including the tenor and interest rates.”

“The required funding will be raised through bank loans supported by the US-Exim guarantee.”

The terms of funding to be backed by the guarantee will be dependent on a number of factors, including market conditions, pricing and investor appetite.

“The facility will be drawn over a three-year period in line with the delivery schedule for the locomotives. The repayment period is 14 years,” said Transnet.

In March, Transnet announced it awarded a R50bn contract to four manufacturers for the building of 1064 locomotives.

The contracts were part of Transnet’s multi-billion rand fleet renewal plan. The locomotives are to be used on the coal line and general freight business of Transnet Freight Rail.

The contracts were awarded to China’s CSR Zhuzhou Electric Locomotive and Bombardier Transportation SA to supply 599 electric locomotives, while General Electric South Africa Technologies and CNR Rolling Stock South Africa (Pty) Ltd would build and supply 465 diesel locomotives.

Transnet said it raised funds on the strength of its financial position and received no funding or guarantees from the fiscus.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24


Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.