CAPE TOWN, South Africa (AP) — The African Development Bank said Thursday it had approved a $1 billion loan to South Africa’s state-owned rail and ports company, Transnet.
The 25-year loan was wholly guaranteed by the South African government and will help finance the first phase of a $8.1 billion investment plan for Transnet to improve the country’s ailing rail and port infrastructure, the bank said.
South Africa has the most industrialized economy in Africa, but its deteriorating rail and ports are seen as significant barriers to foreign business investment and have strangled the efficiency of its export market. Transnet is also one of several state-owned companies to previously come under scrutiny for corruption and mismanagement.
In a statement released by the bank, Transnet Group chief executive Michelle Phillips said the loan would make “a significant contribution to Transnet’s capital investment plan to stabilize and improve the rail network and to contribute to the broader South African economy.”
Boosting South Africa’s stagnant economy and reducing sky-high unemployment levels has been a top priority for President Cyril Ramaphosa, whose African National Congress party was punished by voters in an election in May when it lost its 30-year majority and was forced to share power in a new coalition government.
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