Transnet SOC Limited has secured a €300 million (approx. US$325mn) loan from Agence française de développement to strengthen its role in building a more resilient and efficient economy in South Africa, particularly in the context of climate change
As a key player in freight and energy logistics, Transnet is central to the country’s Just Energy Transition Investment Plan (JET-IP), with a clear mandate to lower the carbon intensity of its operations. The funding will support the “Transnet Freight Decarbonisation and Corporate Sustainability Program”, which is focused on improving operational sustainability while accelerating the shift toward a lower-carbon freight system. The programme also aims to enhance efficiency, align operations with the JET-IP, and reinforce the organisation’s long-term financial stability.
“Transnet remains committed to modernising its rail and port infrastructure and operations to improve service quality, reliability and competitiveness, while advancing sustainable growth as part of its Reinvent for Growth strategy. This funding will assist in achieving these objectives by enhancing energy efficiency and accelerate reforms,” said Transnet group CEO, Michelle Phillips.
The agreement builds on a partnership between Transnet and AFD that dates back to 2009, when the French agency supported the expansion of the Cape Town Container Terminal.
“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 to the competitiveness of the economy. The investments in freight rail recovery, port modernisation and transition minerals export corridors are a demonstration that South Africa's economic competitiveness and decarbonisation goals are inseparable,” said Marie-hélène Loison, AFD’s regional director for Southern Africa.
Unlike conventional project-based financing, this facility is structured to give Transnet flexibility in allocating funds across a broad programme, enabling the company to adapt to evolving operational priorities.
Loan disbursements will depend on Transnet meeting a set of agreed milestones, including:
- Upgrading core transport infrastructure to improve reliability and service delivery, including the rehabilitation of 550 km of rail across the Cape and Container corridors, supporting a shift from road to lower-carbon rail transport;
- Expanding strategic diversification efforts, including exploring green hydrogen and logistics linked to transition minerals as coal volumes decline;
- Preparing for the procurement of 30 MW of renewable energy to support the journey toward net-zero emissions; and
- Strengthening environmental, social and governance (ESG) capabilities.
These targets are designed to lower emissions intensity, improve climate resilience across key transport corridors, and strengthen governance frameworks to support long-term sustainability.
The financing forms part of France’s contribution to South Africa’s Just Energy Transition Partnership (JETP), delivered through AFD since 2021, and aligns with France’s €1 billion commitment announced at COP26.
AFD loan backs South Africa's rail decarbonisation
