State-owned freight logistics company Transnet is partnering with the Development Bank of Southern Africa (DBSA) in a drive to accelerate private sector participation (PSP) in its multibillion-rand infrastructure investment programme.

The initiative, agreed to by Transnet Acting Group Chief Executive Siyabonga Gama and his DBSA counterpart Patrick Dlamini, paves the way for the development bank to provide funding and expertise for PSP preparation, work including transaction advisory services.

In terms of the agreement, DBSA will share in project preparation funding, contribute financial and project management skills and capacity, provide indicative terms and amounts to expedite funding of PSP project execution and provide strategic support for the execution of Transnet’s PSP programme.

“Finding innovative funding solutions is a key element of the market demand strategy (MDS). Partnerships with the private sector will not only broaden our sources of funding for capital investments, they will give us access to private sector skills and expertise.

“At the same time, they will help us manage risk and provide alternative procurement tools for large infrastructure projects. In addition, PSPs provide entities like Transnet with mechanisms to ensure black participation in large-scale projects,” Gama said.

Increasing private sector participation in South Africa’s infrastructure investment programme is part of DBSA’s mandate as a development finance institution. In addition, once a project is ready to go to market, DBSA will also be eligible to compete as one of the funders.

“This partnership speaks to one of our core objectives of supporting economic growth through investing in economic infrastructure – with transportation being one of the four key focus sectors to achieve this objective,” Dlamini said.

Transnet’s MDS is pillared on a rolling seven-year R336 billion infrastructure investment programme.

The projects in the PSP portfolio include the manganese common user loading facility in Northern Cape, the Grootvlei coal loading facility in Mpumalanga, the Tambo Springs inland container terminal to be built in Ekurhuleni and the container terminal at the soon to be built Durban Dig-Out Port.

“Both DBSA and Transnet, as state-owned entities, should be immensely proud that we are able to work together in an innovative manner to unlock hundreds of billions of rand in value for the South African economy,” Gama said