Transnet secures new loan, reports FY 2023 loss

The New Development Bank (NDB) has announced a R5 billion (US$280 million) loan agreement with Transnet, South Africa’s state-owned freight transport and logistics company.

The loan agreement announced on 30 August, signed during NDB’s 9th Annual Meeting, aims to enhance the efficiency and capacity of South Africa’s freight rail sector. The improvement and modernisation of the freight rail sector program includes rail network infrastructure renewal, locomotive overhauls, and wagon fleet renewal.

According to Transnet’s statement, the program is expected to restore freight rail volumes in South Africa, improving operational performance and reliability, and contributing to a sustainable future.

Recovery plan

NDB President, H.E. Dilma Rousseff, said: “We are delighted to partner with Transnet in this transformative initiative. This loan underscores NDB’s commitment to supporting sustainable development and economic growth in South Africa. By modernising the freight rail sector, we aim to facilitate more efficient logistics operations that will benefit the entire region and align with our goal of investing in a sustainable future.”

Transnet Group Chief Executive, Michelle Phillips, added: “This investment is important for Transnet, as we accelerate the implementation of the Recovery Plan and economic reforms. The modernisation program will enhance our operational capabilities and contribute to the growth and competitiveness of the economy. We are grateful for NDB’s support and look forward to a successful collaboration.”

In July, Transnet won a R18.85 billion (US$1 billion) corporate loan from the African Development Bank Group to support its recovery and growth plans. The South African government fully guarantees the 25-year loan, the bank said.

More recently, in August, Transnet announced the company was seeking government assistance to alleviate its R130 billion (US$ 7.3 billion) debt, aiming to improve its freight rail and port capacities.

About NDB

The New Development Bank was created in 2015 by Brazil, Russia, India, China, and South Africa to mobilize resources for infrastructure and sustainable development projects in the BRICS and other emerging market economies and developing countries. In 2021, the NDB expanded its membership and admitted Bangladesh, Egypt, the United Arab Emirates, and Uruguay as its new member countries.

Transnet, South Africa’s state-owned ports and rail operator, reported a loss of R7.3 billion (US$414.6 million) for its financial year ending in March 2024, despite a significant increase in revenue.

Transnet reports loss despite revenue growth

On 2 September, Transnet reported a loss of R7.3 billion (US$414.6 million) for its financial year ending in March 2024, despite a significant increase in revenue.

The company announced that its revenue grew by 11.6% to R76.7 billion (US$4.26 billion). This increase was attributed to tariff hikes across its operations and higher volumes in its rail and container businesses, although it was partially offset by a decrease in pipeline volumes.

Read more about Transnet’s financial results for FY 2023 HERE.