Multilateral finance institution the European Investment Bank’s (EIB’s) development finance arm EIB Global has extended a €350-million loan to State-owned transport and logistics company Transnet.

This will finance the renewal and rehabilitation of Transnet’s port and freight railway infrastructure and facilitate a shift to cleaner modes of transport, as well as support the development of new assets critical to building a green hydrogen value chain.

By improving transport efficiency and reducing freight costs and emissions, the project is expected to have a broad economic impact across sectors. It will strengthen the country’s connectivity and competitiveness, while contributing to job creation, EIB Global says.

The loan is supported by a €21-million grant from the EU.

The investment is expected to help South Africa move towards a low-carbon, climate- resilient economy, as part of South Africa’s Just Energy Transition Investment Plan (JET-IP) that is supported by donor countries.

The investment aligns with EU and South African climate goals and is expected to reduce emissions, freights costs, improve transport efficiency and boost trade connectivity.

“People and communities rely on safe, efficient transport every day. By supporting Transnet’s modernisation, we are helping to strengthen the connections that allow businesses to grow, workers to access new opportunities and families to build more secure futures.

“This investment is a concrete expression of our commitment to a just transition that delivers cleaner infrastructure, fairer opportunities and lasting benefits for people across South Africa,” says EIB VP Ambroise Fayolle, who oversees the EIB’s operations in South Africa.

The investment reflects the EIB’s strong commitment to supporting South Africa’s transition to a greener, more inclusive economy. Enhancing port and rail connectivity will strengthen the country’s position in regional and global trade, he adds.

Further, the development of green hydrogen infrastructure is expected to play a key role in South Africa’s journey towards climate neutrality.

Through its Global Gateway investment strategy, the EU is supporting concrete investments in South Africa’s green hydrogen economy, which are investments that cut emissions and create high-quality jobs, says European Commissioner for International Partnerships Jozef Síkela.

“With its central role in rail, ports and pipelines, Transnet is essential to building a credible and scalable hydrogen ecosystem. This partnership will help deliver the expertise and infrastructure needed to achieve South Africa’s 2050 net-zero goals,” he says.

“This support from the EU and its bank comes at a pivotal moment for Transnet and South Africa. Modern, sustainable transport infrastructure is the backbone of a thriving economy,” says Transnet CE Michelle Phillips.

“These investments will help us move goods more efficiently, reduce emissions and prepare our ports and railways for a greener, more connected future. It’s a powerful vote of confidence in our people, our capabilities and our country’s vision for a just energy transition,” she says.