Transnet secures R6bn AFD loan in landmark green partnership at G20 Summit

South Africa’s push toward a low-carbon future received a major boost this week as Transnet announced a significant new partnership with the French Development Agency (AFD), backed by a grant from the European Union.

The agreement, unveiled on the sidelines of the G20 Leaders' Summit hosted in Johannesburg over the weekend, marks one of the most substantial international commitments yet to the decarbonisation of the nation’s ports, railways and pipeline infrastructure.

The announcement comes as South Africa attempts to reposition itself within the global clean-energy economy. With abundant wind, solar and land resources, the country is widely seen as a potential future exporter of green hydrogen and related products, provided it can build the necessary transport and export infrastructure. 

Transnet has been under growing pressure to modernise its ageing logistics network, which has strained national supply chains and dampened economic growth.

With rail infrastructure in particular deteriorating, industries from mining to manufacturing have increasingly shifted to road transport, escalating emissions and congestion. Against this backdrop, the partnership arrives as both a financial lifeline and a strategic pivot toward clean energy.

At the heart of the deal is a proposed €300 million (approximately R6 billion) sustainability-linked loan from AFD.

The funding, Transnet says, will directly support its capital investment programme, enabling the refurbishment of key assets while accelerating the company’s shift to renewable energy and new green technologies.

“The funding package from AFD will assist us in revitalising our infrastructure while supporting the clean energy initiatives under the capital investment programme,” said Transnet Group CEO Michelle Phillips.

“In addition, this initiative will contribute significantly to supporting Transnet’s decarbonisation journey while actively exploring the company’s strategic role and potential opportunities within the green hydrogenvalue chain.”

Unlike conventional financing, disbursements under the sustainability-linked structure will depend on Transnet meeting specific climate-aligned targets.

These include expanding into transition minerals and sourcing 300 GWh of renewable electricity annually, equivalent to 20% of its total electricity needs. The shift is expected to significantly cut Transnet’s carbon footprint, particularly across its energy-intensive rail and port operations.

The agreement also targets modal shift, a long-standing government priority. With road freight dominating the movement of goods, Transnet has committed to rehabilitating 550km of strategic railway corridors.

According to Transnet, AFD will participate in the modernization of port infrastructure, strengthening service quality, reliability, competitiveness, and overall attractiveness across Transnet’s network.

For Transnet, which has faced both operational and financial headwinds in recent years, the move represents a significant step toward stabilisation and renewal. 

For AFD, the partnership deepens a long-standing relationship with South Africa’s logistics sector.

“Transnet is a long-standing partner of AFD, and is a key actor in South Africa’s low carbon transition,” said AFD CEO Rémy Rioux.

“Our support will enable Transnet to pursue opportunities that will emerge from the green hydrogen economy, contribute to the modernisation of its operations and reduce its environmental footprint.”

The loan forms part of France’s contribution to the Just Energy Transition Partnership (JETP), the multilateral financing framework announced at COP26.

France had pledged €1 billion toward supporting South Africa’s energy transition, and the Transnet agreement now becomes one of the most tangible expressions of that commitment.

Complementing the AFD loan, the European Union announced a €7 million (R140 million) grant dedicated to advancing Transnet’s green hydrogen strategy across ports, rail, pipelines, and associated facilities. The grant will fund feasibility studies, environmental and technical assessments, pilot projects, and broader strategic planning to refine Transnet’s hydrogen roadmap.

Jozef Síkela, EU Commissioner for International Partnerships, said the investment aligns with the EU’s Global Gateway strategy, which seeks to unlock sustainable infrastructure development worldwide.

“Through our investment strategy Global Gateway, the EU is supporting concrete investments in South Africa’s green hydrogen economy. Investments that cut emissions and create high-quality jobs,” Sikela said. 

“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 andinfrastructure needed for South Africa’s 2050 net-zero goals.”

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