• Transnet secures €300M AFD loan to support energy transition, rail upgrades

• Loan tied to green targets, including 300 GWh renewable power use yearly

• EU adds €7M grant to fund green hydrogen strategy, pilot projects under JETP
  

South African state-owned logistics firm Transnet has secured a 300-million-euro ($321 million) loan from the French Development Agency (AFD). The financing will support Transnet’s energy transition initiatives and the modernization of its strategic infrastructure.

The agreement was finalized during the G20 summit held on Nov. 22-23 in Johannesburg. The sustainability-linked loan's disbursement is conditional on Transnet meeting specific environmental and strategic targets, including increasing its purchase and use of renewable electricity to 300 GWh per year, representing 20% of the company's energy needs.

The financing will also support the modernization of 550 km of railway lines to shift freight from road to rail, and the upgrade of port infrastructure to improve the quality, reliability, and competitiveness of logistics services.

The European Union is providing an additional 7-million-euro grant through the AFD to support the development of a green hydrogen strategy. This funding will finance feasibility studies, impact assessments, pilot projects, and technical assistance.

The French agency said this grant allows Transnet to position itself within the green hydrogen economy, particularly in the rail, port, and pipeline sectors. The objective is to support the creation and implementation of a green hydrogen roadmap for key segments, in line with Transnet's overall decarbonization strategy.

The dual AFD-EU financial support is part of the Just Energy Transition Partnership (JETP), a program launched in 2021 by France to support South Africa's energy transition. It also fulfills Paris's commitment to mobilize 1 billion euros for this objective.

Transnet is a key player in national and regional logistics. Next steps include rigorous monitoring of sustainability targets and the implementation of hydrogen pilot projects.

Olivier de Souza