African Development Bank Approves $1 Billion Loan for Transnet

The African Development Bank has sanctioned a $1 billion loan to South Africa's Transnet, aimed at revitalizing the nation’s rail and port systems. The loan, backed by the South African government, is part of an $8.1 billion investment plan to tackle infrastructure challenges and promote economic growth.

The African Development Bank announced on Thursday that it has approved a $1 billion loan for South Africa's state-run rail and ports firm, Transnet.

The 25-year loan, which is fully guaranteed by the South African government, will finance the first phase of an $8.1 billion plan to bolster Transnet's ailing infrastructure, the bank stated.

Although South Africa boasts the most industrialized economy on the continent, its deteriorating rail and port systems stymie foreign investment and cut into its export market efficiency. Additionally, Transnet has faced scrutiny over allegations of corruption and mismanagement.

Michelle Phillips, Transnet Group's chief executive, emphasized that the loan would significantly contribute to the firm's capital investment plan, which aims to stabilize and enhance the rail network while benefiting South Africa's broader economy. Addressing economic stagnation and reducing high unemployment rates are key priorities for President Cyril Ramaphosa, whose African National Congress recently lost its majority in a historic shift.

(With inputs from agencies.)