R5.9 billion loan for South Africa’s state-owned logistics entity

France’s development agency has agreed to give South African state-owned logistics group Transnet a 300 million euro ($345.78 million) loan for clean energy initiatives.

Transnet manages the freight rail network, ports and pipelines in Africa’s biggest economy.

The South African government is trying to revive the company after years of chronic underperformance that have stifled exports of commodities such as coal and iron ore, but turnaround efforts are only starting to bear fruit.

Loan disbursements from France’s AFD agency will be tied to progress on sustainability targets, including Transnet increasing its use of renewable energy, Transnet and AFD said in a joint statement on Tuesday.

The financing will also promote a shift from road transport to rail, including the rehabilitation of 550 kilometres of railway, and the modernisation of port infrastructure, the statement said.

• Reporting by Sfundo Parakozov.