$5bn loan for Transnet

2013-03-26 15:30

The China Development Bank will loan Transnet about $5 billion (R46 billion) to revamp its ageing railways, which transport commodities including coal and iron ore, a source close to the deal has said.

“The figure may go up or down and it is a loan,” the source said, but asked not to be named. “The money will be used for railway infrastructure.”

The deal was reached before a summit of the leaders of the emerging market powers Brics – Brazil, Russia, India, China and South Africa – opened in Durban today with a goal of helping build the economies of Africa.

Transnet plans to invest up to R300 billion over seven years to expand railway, ports and pipelines to boost exports of commodities from Africa’s biggest economy.

The programme will be financed using Transnet’s own resources and money raised in capital markets.

Transnet today said the group agreed to cooperate with the Chinese bank, but did not mention any figures.

“The cooperation includes, but is not limited to, the financing of the construction and upgrade of railway, and port infrastructure, localisation of equipment manufacturing – especially rail and port,” it said.

The two parties also agreed to work together on cross-border infrastructure development throughout Africa.

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