SOUTH Africa is to receive a $US 1.5bn loan approved by the World Bank on June 9 to facilitate reform in the rail freight and energy sectors. The Infrastructure Modernisation for South Africa Development Policy Loan is aimed at supporting critical structural reforms to enhance the efficiency, sustainability, and climate resilience of the country’s infrastructure services.
The loan will support the South African government’s efforts to transform the freight sector by creating a level playing field between Transnet and potential private operators, paving the way for more efficient, affordable, and climate-resilient transport services. The funding will also support efforts to reform the energy sector and state-owned Eskom. The amount of funding that the rail freight sector will receive is yet to be disclosed.
As part of the reforms, the government is focusing on establishing an independent transport regulator to ensure fair and open access for private operators, while encouraging new operators to enter the market. It is aiming to increase available rail network capacity from 25% in 2023 to 65% by 2027 and enable the entry of at least four private operators.
Last year the African Development Bank (AfDB) agreed a $US 1bn loan to allow Transnet to progress with an ambitious five-year investment plan to upgrade existing infrastructure.
