Transnet Secures €300m Deal to Drive Green Ports, Rail and Hydrogen Transition

The agreement marks one of the most significant green-transition financing commitments in the logistics sector in recent years and is aligned with South Africa’s wider Just Energy Transition ambitions.

 

South Africa’s state-owned freight and logistics company, Transnet, has entered a landmark partnership with the French Development Agency (AFD) — supported by the European Union (EU) — to accelerate the decarbonisation of the country’s ports, rail corridors and logistics infrastructure. The agreement marks one of the most significant green-transition financing commitments in the logistics sector in recent years and is aligned with South Africa’s wider Just Energy Transition ambitions.

Announced on the sidelines of the historic G20 Leaders’ Summit hosted in South Africa, the deal positions Transnet at the forefront of global efforts to transform freight systems towards cleaner, more resilient and climate-aligned operations. The centrepiece of the agreement is a proposed €300 million (approximately R6 billion) sustainability-linked loan to support the company’s extensive decarbonisation and modernisation programme.

Strategic Funding to Revitalise Infrastructure and Cut Emissions

Transnet Group Chief Executive Michelle Phillips said the AFD funding package will play a dual role: revitalising critical infrastructure and advancing clean-energy investments across the company’s expansive capital programme.

“This funding package will assist us in revitalising our infrastructure while supporting the clean energy initiatives under the capital investment programme,” Phillips said. “In addition, this initiative will contribute significantly to supporting Transnet’s decarbonisation journey while actively exploring the company’s strategic role within the green hydrogen value chain.”

The sustainability-linked nature of the loan means funding disbursement will be tied to measurable progress on key climate targets. These include:

• purchasing 300 GWh of renewable electricity per year — equivalent to 20% of Transnet’s total energy demand

• boosting investment into transition minerals, supporting rail corridors for critical mineral transport

• shifting heavy cargo movement from road back to rail, easing congestion and reducing emissions

• rehabilitating 550 km of railway lines essential for freight recovery and economic growth

• modernising port infrastructure to improve efficiency, reliability and global competitiveness

Strengthening South Africa’s Green Hydrogen Value Chain

A major component of the agreement is a comprehensive push into green hydrogen, an emerging sector identified as a future cornerstone of South Africa’s reindustrialisation and net-zero strategy. Alongside the loan, the EU and AFD will provide a €7 million (R140 million) grant to expand Transnet’s green hydrogen capabilities.

The funding will support:

• feasibility studies and technical assessments

• environmental and socio-economic impact analyses

• pilot projects across ports, rail lines, pipelines and storage facilities

• engineering and operational frameworks for hydrogen handling

• long-term planning for domestic and export hydrogen corridors

AFD CEO Rémy Rioux described Transnet as a “key actor in South Africa’s low-carbon transition,” noting that France views the partnership as a critical component of its contribution to the Just Energy Transition Partnership (JETP) — the global multi-billion-rand programme backing South Africa’s shift to cleaner energy systems.

“Our support will enable Transnet to pursue opportunities emerging from the green hydrogen economy, contribute to the modernisation of its operations and reduce its environmental footprint,” Rioux said.

EU: Transnet Essential to Building a Scalable Hydrogen Ecosystem

EU Commissioner for International Partnerships Jozef Síkela reaffirmed Europe’s long-term commitment to South Africa’s climate transition through the Global Gateway investment strategy, which targets sustainable infrastructure and green industrialisation worldwide.

“With its central role in rail, ports and pipelines, Transnet is essential to building a credible and scalable hydrogen ecosystem,” Síkela said. “This partnership will help deliver the expertise and infrastructure needed for South Africa’s 2050 net-zero goals.”

Green Logistics: A Cornerstone of South Africa’s Industrial Future

Transnet’s decarbonisation efforts form part of a broader national push to decline reliance on fossil fuels, unlock green industrialisation, and reposition South Africa as a competitive global logistics hub. The transition from road to rail — a key priority — is also expected to reduce freight costs, ease highway damage, curb emissions and revive long-neglected freight corridors.

The modernisation of ports, including Durban, Cape Town, Gqeberha and Richards Bay, is central to improving turnaround times, attracting new investment, and boosting the country’s export competitiveness, particularly in agriculture, mining and green-energy sectors.

Long-Term Vision Anchored in Global Climate Goals

The AFD-Transnet-EU partnership is expected to set new standards for climate-aligned infrastructure financing, with ripple effects across Africa’s logistics and energy sectors. It builds on France’s €1 billion pledge at COP26 to support South Africa’s just energy transition and aligns with global commitments to limit warming, enhance climate resilience and expand green industrial opportunities.

With this deal, Transnet signals that it is not only modernising its ageing infrastructure but also actively positioning itself as a central catalyst in South Africa’s low-carbon economic future — from renewable energy procurement to hydrogen export corridors and next-generation freight systems.