South Africa’s state logistics operator Transnet has secured a €300 million (US$350 million) financing package from the French Development Agency to support efforts to decarbonise its freight transport network, officials said Monday.
The loan from the French Development Agency is aimed at modernising rail infrastructure, expanding renewable energy use and shifting freight movement away from road transport, which is more carbon-intensive.
The agreement forms part of South Africa’s broader energy transition agenda, which is being supported by the international Just Energy Transition Partnership, a programme launched at COP26 to help coal-dependent economies reduce emissions and diversify energy systems.
Transnet chief executive Michelle Phillips said the funding would support the company’s “Reinvent for Growth” strategy, which focuses on improving efficiency, reliability and sustainability across its rail and port operations.
“Transnet remains committed to modernising its rail and port infrastructure and operations to improve service quality, reliability and competitiveness, while advancing sustainable growth,” Phillips said.
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A key component of the programme is the rehabilitation of 550 kilometres of railway lines along the Cape corridors, which are critical freight routes linking South Africa’s industrial hubs to ports.
The project also aims to expand container rail capacity to encourage a shift from trucks to trains, a transition expected to significantly reduce greenhouse gas emissions from the transport sector.
In addition to rail upgrades, the financing will support the development of a 30-megawatt renewable energy project intended to power parts of Transnet’s operations, reducing reliance on fossil fuels.
The programme also includes exploratory work on green hydrogen and logistics services linked to transition minerals, reflecting a broader push to align infrastructure investment with global decarbonisation trends.
Officials said the financing structure allows flexibility, enabling Transnet to allocate funds across different initiatives based on progress milestones and operational needs.
The deal builds on France’s ongoing role in supporting South Africa’s climate transition, particularly through AFD-backed studies on repurposing coal-fired power plants operated by Eskom and developing new skills training programmes for affected workers.
South Africa’s broader transition strategy is estimated at around US$9.3 billion under the JETP framework, combining public and private financing to accelerate decarbonisation while managing social and economic impacts.
Transport Minister Barbara Creecy has previously noted that freight transport is a major emissions source, accounting for 12.7 percent of the country’s total emissions in 2025.
Policy experts say improving rail efficiency is central to reducing emissions in the logistics sector, as South Africa remains heavily dependent on road freight despite having an extensive rail network.
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The latest funding is expected to help address long-standing infrastructure constraints that have limited Transnet’s performance in recent years, including maintenance backlogs and capacity bottlenecks.
Analysts say the success of the initiative will depend on execution capacity and coordination between government, state-owned enterprises and private logistics operators.
If effectively implemented, the programme could help reposition rail freight as a more competitive and environmentally sustainable alternative to road transport, while supporting South Africa’s broader climate commitments.
The agreement also signals growing international confidence in South Africa’s energy transition strategy, even as the country continues to navigate economic pressures and infrastructure challenges.
