Transnet, the operator of South Africa's rail, port, and pipeline network, has announced a new partnership with the French Development Agency (AFD), supported by the European Union (EU), to advance its decarbonisation plans. The announcement was made alongside the G20 Summit in South Africa.
AFD has proposed a €300 million (R6 billion) sustainability-linked loan to support Transnet's efforts to reduce emissions and modernise infrastructure. According to Transnet Group Chief Executive Michelle Phillips, "The funding package from AFD will assist us in revitalising our infrastructure while supporting the clean energy initiatives under the capital investment programme." She added that the initiative will also support work related to Transnet's green hydrogen ambitions.
© Transnet
Disbursements under the loan will be tied to progress on targets such as increasing the procurement of renewable electricity to 300 GWh per year, equivalent to 20 per cent of Transnet's power requirements, and expanding activities linked to transition minerals. The loan will also support the rehabilitation of 550 km of railway and contribute to port-modernisation projects aimed at improving service levels and reliability.
AFD CEO Rémy Rioux said, "Transnet is a long-standing partner of AFD, and is a key actor in South Africa's low-carbon transition. Our support will enable Transnet to pursue opportunities that will emerge from the green hydrogen economy, contribute to the modernisation of its operations, and reduce its environmental footprint."
The proposed loan forms part of France's contribution to the Just Energy Transition Partnership (JETP) with South Africa. France committed €1 billion to the JETP during COP26, and AFD has been involved in its implementation since 2021.
Alongside the loan, a €7 million (R140 million) EU-funded grant will support Transnet's green hydrogen strategy. This grant will be channelled through AFD to finance studies, pilot projects, impact assessments, and technical assistance across the organisation's rail, port, pipeline, and facility operations.
EU Commissioner for International Partnerships Jozef Síkela said the EU's Global Gateway investment strategy is backing projects that reduce emissions and create employment. He noted Transnet's role in enabling the development of a hydrogen economy through its logistics network.
The partnership focuses on developing the technical groundwork and infrastructure required to progress decarbonisation efforts within South Africa's transport and logistics system.
For more information:
Transnet
Email: [email protected]
Louise Dewast
AFD
Email: [email protected]
Frank Oberholzer
EU
Email: [email protected]
