The New Development Bank (NDB) on Friday signed a R5-billion loan agreement with State-owned freight transport and logistics group Transnet.

The agreement was signed during the NDB’s ninth yearly meeting, held in Cape Town.

Transnet’s freight rail sector renewal programme, which aims to restore freight rail volumes in South Africa, includes infrastructure renewal, locomotive overhaul and wagon fleet renewal workstreams.

The South African government will guarantee the loan.

“We need to fix the network,” Transnet CEO Michelle Phillips told Engineering News Online following the signing ceremony. “And we have a long way to go to do that.”

Phillips added that the network was in “a terrible state”.

“We have a lot to do to lift it to the standard where everyone can use it – us and private operators.”

“This loan underscores NDB’s commitment to supporting sustainable development and economic growth in South Africa,” noted NDB president Dilma Rousseff.

“By modernising the freight rail sector, we aim to facilitate more efficient logistics operations that will benefit the entire region and align with our goal of investing in a sustainable future.”

The NDB was created in 2015 by Brazil, Russia, India, China and South Africa (Brics) to mobilise resources for infrastructure and development projects in Brics and other emerging market economies and developing countries.

In 2021, the NDB began expanding its membership and admitted Bangladesh, Egypt, the United Arab Emirates and Uruguay as its newest members.

The NDB has, to date, financed 14 projects in South Africa, including the new Transnet loan agreement.