SOUTH AFRICA: French development agency AFD has signed a memorandum of understanding to accelerate state-owned rail and port logistics group Transnet’s transition towards net zero emissions, and is proposing to provide a €300m sustainability-linked loan.
The loan would support the rehabilitation of 550 km of railway and the modernisation of port infrastructure to strengthen the service quality, reliability, competitiveness and the overall attractiveness of Transnet’s network.
Disbursements would be tied to Transnet meeting targets for diversifying into transition minerals and purchasing 300 GWh of renewable electricity per year, equivalent to 20% of its electricity needs.
The EU is also providing a €7m grant delegated to AFD which will assist Transnet in advancing its green hydrogen strategy across rail, ports, pipelines and its facilities. This will support key studies, impact assessments, pilot projects and technical assistance that will refine Transnet’s green hydrogen roadmap and accelerate the scale-up of low-carbon hydrogen initiatives across South Africa.
‘The funding package from AFD will assist us in revitalising our infrastructure while supporting the clean energy initiatives under the capital investment programme’, said Transnet Group CEO Michelle Phillips on November 25. ‘In addition, this initiative will contribute significantly to supporting Transnet’s decarbonisation journey while actively exploring the company’s strategic role and potential opportunities within the green hydrogen value chain.’
