Transnet in partnership with the French Development Agency (AFD), and the European Union (EU), have partnered to decarbonise South Africa’s state-owned ports and railway operator.
Transnet, had proposed €300 million (R6 billion) to support this objective.
Michelle Phillips, Transnet Group’s Chief Executive, said on Tuesday, the funding package will come from the AFD, to assist in revitalising infrastructure while supporting clean energy initiatives under the capital investment programme.
“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.”
Phillips also said because this is a sustainability-linked loan, Transnet will also support transition minerals and increase the use and purchase of 300 GWh of renewable electricity per year.
The French contribution will also aim to promote a shift from road transport to rail, including the rehabilitation of 550 km of railway, as well as the modernization of port infrastructure, strengthening service quality, reliability, competitiveness, and overall attractiveness across Transnet’s network.
Rémy Rioux, AFD’s CEO, 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.”
This prospective AFD loan to Transnet forms part of France’s contribution to the Just Energy Transition Partnership (JETP), which AFD has been implementing since 2021, and fulfils France’s €1 billion commitment announced at COP26 in support of South Africa’s just energy transition.
Picture: Supplied