State-owned freight logistics group Transnet has signed a R2.8 billion loan with Germany’s KfW Development Bank to fund part of its 1064 locomotive acquisition programme.
Transnet will use the proceeds of the loan to fund the acquisition of 240 electric locomotives it will build with Bombardier in its manufacturing facilities in Durban. These are part of Transnet’s record-breaking 1064 locomotives acquisition programme. The agreement forms part of Transnet’s focus on agility and innovation in raising the required funding to execute its seven-year rolling R336 billion infrastructure investment programme – the Market Demand Strategy. The loan will mature in 15-years, with a five-year grace period in which Transnet will only be paying interest. Only a third of Transnet’s funding requirement for the Market Demand Strategy (MDS) is raised through the markets – the rest of the capital investment programme is funded through cash generated from operations. German Ambassador to South Africa, Dr Horst Freitag, emphasised the solid trade relations between the two countries. South Africa is Germany’s largest trading partner in Africa.
