Transnet has secured a R2.2 billion loan from the French Development Agency (AFD) to help fund the expansion of Cape TownÔÇÖs container terminal.
The loan will be rolled out over 15 years to help fund the R4.6 billion terminal expansion, which it is hoped will almost double terminal capacity to 1.4 million 20-foot units per year by 2012.
The work, much of which is already underway, will include deepening the entrance channel and basin, refurbishing berths, replacing container handling equipment and reconfiguring onshore areas to provide more stack capacity and improved land access.
Although the money is in euros, it will distributed in rand, which will help to protect state-owned Transnet somewhat from foreign exchange rate fluctuations.
The Cape Town project forms just part of TransnetÔÇÖs wider R80 billion, five-year infrastructure investment programme. By the end of the 2009/2010 period, the transport utility will have spent R20 billion on capital expenditure programmesÔÇösimilar to the amount spent in 2008/2009.
Earlier this year, Transnet secured a R3 billion loan from the Japan Bank for International Co-operation, which will be used for the widening and deepening of Durban harbour.
Last month, it was reported that Transnet planned to raise around R3.75 billion through bonds it would issue in the US and Europe. It would use that money to upgrade iron ore and coal railway lines and to build a R12 billion fuel pipeline from Durban to Johannesburg.
AFD and Transnet called the agreement, which was announced at a signing ceremony in Cape Town yesterday, ÔÇ£ground-breakingÔÇØ.
Chris Wells, TransnetÔÇÖs acting Group CEO said: ÔÇ£We are pleased at this historic partnership (between Transnet and AFD). This is by far the largest single funding initiative for one project.ÔÇØ
He continued: ÔÇ£We have reviewed every project in our R80 billion five-year investment programme in light of the fall in demand caused by the recession. We are pleased to say that we will be proceeding with all the major and strategically significant projects in our portfolio. All projects that are required by our customers and our country are being continued.ÔÇØ
Jean-Michel Severino, AFDÔÇÖs CEO added: ÔÇ£We believe this will build the portÔÇÖs capability to meet the growing capacity demand.
ÔÇ£The AFD is also confident that this will play a major a role in stimulating the South African economy and sustaining the jobs for South Africans working at the ports and the construction companies implementing the project.ÔÇØ
AFD is a development finance institution owned by the French government. Since it started operating in South Africa 15 years ago, it has invested Ôé¼1.2 billion (R13.3 billion) in the country's municipalities, via the Development Bank of Southern Africa.
AFD will also sign a funding agreement for R100 million with the development bank, which will go to South AfricaÔÇÖs large metropolitan cities.
AFD recently lent Airports Company South Africa Ôé¼85 million (R946 million) for renovations at the OR Tambo International Airport.
*        *        *
