Transnet has finalised a US $2.42 billion loan with the China Development Bank (CDB) to finance a fleet of new electric and diesel locomotives.
The loan, which will released in an initial $1.45 billion tranche over the next four years, represents the majority of the funding for what is probably the largest locomotive procurement programme in the world.
The state-owned operator is investing over $4 billion on 1064 new locomotives to support the projected rise in South Africa’s rail freight volumes.
Transnet’s acting group chief executive, Siyabonga Gama, and Li Gang, CDB’s vice president, signed the loan agreement during the World Economic Forum in Cape Town.
The loan will finance the construction of 232 diesel and 359 electric locomotives from Chinese train builders CNR and CSR, which recently announced the completion of a planned merger.
Transnet has 15 years to repay the loan, including a four-and-a-half year grace period.
In total, Transnet is spending more than $27 billion upgrading is rail, port and pipeline infrastructure, with the majority of that going on rail-related projects.
