Johannesburg: Transnet and the French Development Agency (AFD), supported by the European Union (EU), have announced a significant partnership to accelerate the decarbonisation of South Africa’s ports and rail networks. This collaboration aims to make strides towards reducing carbon emissions in the transportation sector.
According to South African Government News Agency, Transnet, responsible for managing South Africa’s rail, port, and pipeline infrastructure, has set ambitious goals for decarbonisation and corporate sustainability. To support these objectives, AFD is proposing a £300 million (R6 billion) loan. This funding will aid in revitalising infrastructure while backing clean energy initiatives under Transnet’s capital investment programme.
The agreement to tackle carbon emissions was reached during the first-ever G20 Leaders’ Summit hosted in South Africa last weekend. As a sustainability-linked loan, disbursements will be contingent upon progress towards strategic targets. These include diversifying into transition minerals and increasing the use and purchase of 300 GWh of renewable electricity per year, which accounts for 20 percent of Transnet’s electricity needs.
The French contribution will also promote a transition from road transport to rail, including the rehabilitation of 550 km of railway. It will support the modernisation of port infrastructure, enhancing service quality, reliability, competitiveness, and overall appeal across Transnet’s network.
AFD CEO R©my Rioux stated, “Transnet is a long-standing partner of AFD and is a key actor in South Africa’s low carbon transition. Our support will enable Transnet to pursue opportunities in the green hydrogen economy, contribute to the modernisation of its operations, and reduce its environmental footprint.”
This proposed AFD loan forms part of France’s contribution to the Just Energy Transition Partnership (JETP), which AFD has been implementing since 2021, fulfilling France’s £1 billion commitment made at COP26 to support South Africa’s just energy transition.
Complementing the loan, a £7 million (R140 million) grant from the EU will assist Transnet in advancing its green hydrogen strategy, a cornerstone of its decarbonisation pathway across key sectors. This funding will support essential studies, impact assessments, pilot projects, and technical assistance to refine Transnet’s green hydrogen roadmap and accelerate low-carbon hydrogen initiatives across South Africa.
EU Commissioner for International Partnerships Jozef Skela remarked, “Through our investment strategy Global Gateway, the EU is supporting investments in South Africa’s green hydrogen economy. Investments that cut emissions and create high-quality jobs. With its central role in rail, ports, and pipelines, Transnet is essential to building a credible and scalable hydrogen ecosystem. This partnership will help achieve South Africa’s 2050 net-zero goals.”