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Bank of China contributes to $657 million syndicated ‘B’ loan to support Transnet’s 7-year rolling capital expenditure program (CEP)
| Funder | Bank of China (BOC) |
|---|---|
| Recipient Organization | Transnet SOC Ltd |
| Country | South Africa |
| Start Date | Feb 10, 2016 |
| End Date | Jan 26, 2026 |
| Duration | 3,638 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 97769 |
Grant Description
In 2016, Bank of China contributed to USD 657 million syndicated ‘B’ loan to support Transnet’s 7-year rolling capital expenditure program (CEP), South Africa On February 10, 2016, Transnet State-Owned Company Limited (‘Transnet’) — an integrated transport and logistics company that is 100% owned by the Government of South Africa (GoSA) — signed a senior unsecured A-loan agreement (worth $250 million) with the African Development Bank (AfDB) and a senior unsecured B-loan agreement (worth $657 million) with a syndicate of five banks (Bank of China, Bank of Tokyo Mitsubishi, SMBC, Mizuho, HSBC London) to finance its 7-year rolling capital expenditure program (CEP).
The borrower was expected to use the proceeds of the loan to finance the acquisition of rolling stock to increase freight capacity from 80 metric tons to 176 metric tons, thereby migrating freight from road to rail.
The project was ultimately expected to modernize Transnet’s rolling stock fleet, improve operational efficiency, and position the company as a strategic regional player. According to the AfDB, this project reached completion.
Staff Comments
- The precise monetary value of Bank of China’s contribution to ‘B’ loan is unknown. For the time being, AidData assumes equal contributions ($131,400,000) across the five known members of the syndicate.
- Transnet is 100% owned by the Government of South Africa (GoSA), but is legally and financially autonomous. It's responsible for ensuring that the country’s transport and logistics system operates according to international standards.
- Transnet’s capital expenditure program (CEP) was focused on catalyzing economic growth and job creation in South Africa and the wider region. The program was expected to improve productivity and consumption activity by connecting businesses to local and international trade. In rural areas, the program was expected to result in cost effective and reliable transport for agricultural products, thereby supporting food security and rural employment. It involved investment of approximately ZAR 312.2 billion (US$ 27.5 billion) over seven years from 2013 to 2020 to repair, upgrade and expand infrastructure in order to improve South Africa’s efficiency and competitiveness in the transport sector. Approximately 51% of the total investment was intended for repair or replacement of existing infrastructure, while the balance will be used to build additional capacity.
Sources & References
- Annual Financial Statements 2017
- AFRICAN DEVELOPMENT BANK GROUP SYNDICATIONS & CO-FINANCING PRESENTATION September 2020
- ANNUAL FINANCIAL STATEMENTS 2016
- Project Brief - Corporate Loan to Transnet
- AfDB Webinar for the Asian Private Sector on Doing Business in Africa
- South Africa - Corporate Loan to Transnet
- OVERVIEW OF TRANSNET’S ENVIRONMENTAL AND SOCIAL POLICIES AND PROCEDURES
- CORPORATE LOAN TO TRANSNET December 2014 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.
All Grantees
Transnet SOC Ltd
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