Development Bank of Southern Africa joins forces with Transnet to revitalise South African ports and railways

The Development Bank of Southern Africa (DBSA) is teaming up with Transnet SOC Ltd. to revamp South Africa’s beleaguered state ports and freight-rail operator. Transnet’s declining freight services have drawn criticism from key industries, leading South Africa’s presidency to propose privatising ports and rail lines for modernisation. DBSA is aligning with Transnet to tackle these substantial projects, with Transnet unable to self-finance the necessary upgrades. DBSA is also exploring investments in water, green hydrogen, and electrical mini-grids for rural communities, cementing its role in South Africa’s infrastructure transformation.

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South Africa’s DBSA Helps Transnet Prepare for Private Partners

By Antony Sguazzin

The Development Bank of Southern Africa is working with Transnet SOC Ltd. to help the embattled South African state ports and freight-rail operator prepare projects for private participation.

Transnet has come under severe criticism from miners and other industries dependent on its services after the amount of freight, including key export commodities such as iron ore and coal, railed to and from ports plunged by a third over the past five years. Its container terminals are also among the world’s least efficient. 

That’s prompted South Africa’s presidency to propose a plan that would see many of the ports and key rail lines concessioned to private operators that would also be responsible for modernizing the dilapidated infrastructure. 

“There’s quite a number of private-sector participation projects that they’re working on that DBSA has positioned itself to work with them,” Zodwa Mbele, the state-owned development bank’s chief financial officer, said at a conference north of Johannesburg on Wednesday. “Those are massive projects that we would like to partner with them.”

Transnet can’t take on more debt to finance the projects itself, she said. Amid criticism over its performance, Portia Derby announced last month she would quit as chief executive officer, and the head of the company’s freight rail unit resigned a few days later. 

The state company has gone some way toward including private participation on its networks. It’s finalizing an agreement with the Philippines’s International Container Terminal Services Inc. to help run and expand Africa’s biggest container port in Durban. It’s also seeking private operators for a citrus terminal and the key rail-freight line between Durban and South Africa’s industrial heartland of Gauteng, the province where Johannesburg and Pretoria are located.

The DBSA is also in the process of setting up funds with partners to invest in water and green hydrogen projects. 

The lender is in talks to invest in electrical mini-grids to supply power to rural communities in South Africa and neighboring states, Lebogang Seperepere, the head of programmed development execution, said at the event. It plans to sign a pact with power utility Eskom Holdings SOC Ltd. to roll them out, he said. 

The DBSA aims to help set up an electric vehicle charging network in South Africa, Seperepere said.

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